Lipocalins are small ligand-binding proteins with a simple tertiary structure that gives them the ability to bind small, generally hydrophobic, molecules. Recent studies have shown that animal lipocalins play important roles in the regulation of developmental processes and are involved in tolerance to oxidative stress. Plants also possess various types of lipocalins, and bioinformatics analyses have predicted that some lipocalin members may be present in the chloroplast. Here we report the functional characterization of the Arabidopsis thaliana chloroplastic lipocalin AtCHL. Cellular fractionation showed that AtCHL is a thylakoid lumenal protein. Drought, high light, paraquat and abscisic acid treatments induce AtCHL transcript and protein accumulation. Under normal growth conditions, knockout (KO) and over-expressing (OEX) lines do not differ from wild-type plants in terms of phenotype and photosynthetic performance. However, KO plants, which do not accumulate AtCHL, show more damage upon photo-oxidative stress induced by drought, high light or paraquat. In contrast, a high level of AtCHL allows OEX plants to cope better with these stress conditions. When exposed to excess light, KO plants display a rapid accumulation of hydroxy fatty acids relative to the wild-type, whereas the lipid peroxidation level remains very low in OEX plants. The increased lipid peroxidation in KO plants is mediated by singlet oxygen and is not correlated with photo-inhibition of the photosystems. This work provides evidence suggesting that AtCHL is involved in the protection of thylakoidal membrane lipids against reactive oxygen species, especially singlet oxygen, produced in excess light.