Chloroplast development underpins plant growth, by facilitating not only photosynthesis but also other essential biochemical processes. Nonetheless, the regulatory mechanisms and functional components of chloroplast development remain largely uncharacterized due to their complexity. In our study, we identified a plastid-targeted gene, ATYCO/RP8/CDB1, as a critical factor in early chloroplast development in Arabidopsis thaliana. YCO knock-out mutant (yco) exhibited a seedling-lethal, albino phenotype, resulting from dysfunctional chloroplasts lacking thylakoid membranes. Conversely, YCO knock-down mutants produced a chlorophyll-deficient cotyledon and normal leaves when supplemented with sucrose. Transcription analysis also revealed that YCO deficiency could be partially compensated by sucrose supplementation, and that YCO played different roles in the cotyledons and the true leaves. In YCO knock-down mutants, the transcript levels of plastid-encoded RNA polymerase (PEP)-dependent genes and nuclear-encoded photosynthetic genes, as well as the accumulation of photosynthetic proteins, were significantly reduced in the cotyledons. Moreover, the chlorophyll-deficient phenotype in YCO knock-down line can be effectively suppressed by inhibition of PSI cyclic electron transport activity, implying an interaction between YCO and PSI cyclic electron transport. Taken together, our findings de underscore the vital role of YCO in early chloroplast development and photosynthesis.