Mutations in TaCHLI impact chlorophyll levels and yield-related traits in wheat. Natural variations in TaCHLI-7A/B influence plant productivity, offering potential for molecular breeding. Chlorophyll is essential for plant growth and productivity. The CHLI subunit of the magnesium chelatase protein plays a key role inserting magnesium into protoporphyrin IX during chlorophyll biosynthesis. Here, we identify a novel wheat mutant chlorophyll (chl) that exhibits yellow-green leaves, reduced chlorophyll levels, and increased carotenoid content, leading to an overall decline in yield-related traits. Map-based cloning reveals that the chl phenotype is caused by a point mutation (Asp186Asn) in the TaCHLI-7D gene, which encodes subunit I of magnesium chelatase. Furthermore, the three TaCHLI mutants: chl-7b-1 (Pro82Ser), chl-7b-2 (Ala291Thr), and chl-7d-1 (Gly357Glu), also showed significant reductions in chlorophyll content and yield-related traits. However, TaCHLI-7D overexpression in rice significantly decreased thousand kernel weight, yield per plant, and germination. Additionally, natural variations in TaCHLI-7A/B are significantly associated with flag leaf, spike exsertion length, and yield per plant. Notably, the favorable haplotype, TaCHLI-7B-HapII, which displayed higher thousand kernel weight and yield per plant, is positively selected in wheat breeding. Our study provides insights on the regulatory molecular mechanisms underpinning leaf color and chlorophyll biosynthesis, and highlights TaCHLI functions, which provide useful molecular markers and genetic resources for wheat breeding.