The stromal processing peptidase (SPP) is a metalloendopeptidase that cleaves a broad range of precursor substrates. In this study, we isolated a rice mutant showing leaf chlorosis at the early seedling stage but inhibition of root growth during the whole growth period. Genetic analysis demonstrates that the phenotypes of the mutant were caused by a recessive single gene mutation. The mutated gene was cloned by map-based cloning, and was shown to encode an SPP. Sequence analysis showed a glutamate deletion in the highly conserved C-terminus of SPP in the mutant. The mutation of SPP in the mutant was verified by transgenic complementation. SPP is constitutively expressed in all tissues. Subcellular localization analysis indicates that SPP is targeted to the chloroplast. The expression of some genes associated with chloroplast development was decreased in young seedlings of the spp mutant, but not in 14-day-old seedlings. Western blot analysis revealed that the Rubisco small subunit is not precisely processed in the spp mutant in 7-day-old seedlings, but the processing activity in the spp mutant is restored in 14-day-old seedlings. Moreover, the expression levels of Cab1R and Cab2R for the light-harvesting chlorophyll a/b-binding protein (LHCP) were highly up-regulated in the transgenic plants with overexpression of SPP. The present results reveal that SPP is essential for chloroplast biogenesis at the early growth stage and for rice root development; this is the first report on the function of SPP in monocot plants.