Thylakoid biogenesis is an intricate process requiring accurate and timely assembly of proteins, pigments and other cofactors into functional, photosynthetically competent membranes. PSII assembly is studied in particular as its core protein, D1, is very susceptible to photodamage and has a high turnover rate, particularly in high light. PSII assembly is a modular process, with assembly steps proceeding in a specific order. Using aqueous two-phase partitioning to separate plasma membranes (PM) and thylakoid membranes (TM), we studied the subcellular localization of the early assembly steps for PSII biogenesis in a Synechocystis sp. PCC6803 cyanobacterium strain lacking the CP47 antenna. This strain accumulates the early D1-D2 assembly complex which was localized in TM along with associated PSII assembly factors. We also followed insertion and processing of the D1 precursor (pD1) by radioactive pulse-chase labeling. D1 is inserted into the membrane with a C-terminal extension which requires cleavage by a specific protease, the C-terminal processing protease (CtpA), to allow subsequent assembly of the oxygen-evolving complex. pD1 insertion as well as its conversion to mature D1 under various light conditions was seen only in the TM. Epitope-tagged CtpA was also localized in the same membrane, providing further support for the thylakoid location of pD1 processing. However, Vipp1 and PratA, two proteins suggested to be part of the so-called 'thylakoid centers', were found to associate with the PM. Together, these results suggest that early PSII assembly steps occur in TM or specific areas derived from them, with interaction with PM needed for efficient PSII and thylakoid biogenesis.