The defective chloroplasts and leaves-mutable (dcl-m) mutation of tomato was identified in a Ds mutagenesis screen. This unstable mutation affects both chloroplast development and palisade cell morphogenesis in leaves. Mutant plants are clonally variegated as a result of somatic excision of Ds and have albino leaves with green sectors. Leaf midribs and stems are light green with sectors of dark green tissue but fruit and petals are wild-type in appearance. Within dark green sectors of dcl-m leaves, palisade cells are normal, whereas in albino areas of dcl-m leaves, palisade cells do not expand to become their characteristic columnar shape. The development of chloroplasts from proplastids in albino areas is apparently blocked at an early stage. DCL was cloned using Ds as a tag and encodes a novel protein of approximately 25 kDa, containing a chloroplast transit peptide and an acidic alpha-helical region. DCL protein was imported into chloroplasts in vitro and processed to a mature form. Because of the ubiquitous expression of DCL and the proplastid-like appearance of dcl-affected plastids, the DCL protein may regulate a basic and universal function of the plastid. The novel dcl-m phenotype suggests that chloroplast development is required for correct palisade cell morphogenesis during leaf development.