Chloroplasts are considered to be devoid of cysteine proteases. Using transgenic Arabidopsis lines expressing the rice cystatin, oryzacystatin I (OC-I), in the chloroplasts (PC lines) or cytosol (CYS lines), we explored the hypothesis that cysteine proteases regulate photosynthesis. The CYS and PC lines flowered later than the wild type (WT) and accumulated more biomass after flowering. In contrast to the PC rosettes, which accumulated more leaf chlorophyll and carotenoid pigments than the WT, the CYS lines had lower amounts of leaf pigments. High-light-dependent decreases in photosynthetic carbon assimilation and the abundance of the Rubisco large subunit protein, the D1 protein, and the phosphorylated form of D1 proteins were attenuated in the CYS lines and reversed in the PC lines relative to the WT. However, the transgenic lines had higher amounts of LHC, rbcs, pasbA, and pasbD transcripts than the WT, and also showed modified chloroplast to nucleus signalling. We conclude that cysteine proteases accelerate the reconfiguration of the chloroplast proteome after flowering and in response to high-light stress. Inhibition of cysteine proteases, such as AtCEP1, slows chloroplast protein degradation and stimulates photosynthetic gene expression and chloroplast to nucleus signalling, enhancing stress tolerance traits.