Chloroplasts change their intracellular distribution in response to light intensity. Previously, we isolated the chloroplast unusual positioning1 (chup1) mutant of Arabidopsis (Arabidopsis thaliana). This mutant is defective in normal chloroplast relocation movement and shows aggregation of chloroplasts at the bottom of palisade mesophyll cells. The isolated gene encodes a protein with an actin-binding motif. Here, we used biochemical analyses to determine the subcellular localization of full-length CHUP1 on the chloroplast outer envelope. A CHUP1-green fluorescent protein (GFP) fusion, which was detected at the outermost part of mesophyll cell chloroplasts, complemented the chup1 phenotype, but GFP-CHUP1, which was localized mainly in the cytosol, did not. Overexpression of the N-terminal hydrophobic region (NtHR) of CHUP1 fused with GFP (NtHR-GFP) induced a chup1-like phenotype, indicating a dominant-negative effect on chloroplast relocation movement. A similar pattern was found in chloroplast OUTER ENVELOPE PROTEIN7 (OEP7)-GFP transformants, and a protein containing OEP7 in place of NtHR complemented the mutant phenotype. Physiological analyses of transgenic Arabidopsis plants expressing truncated CHUP1 in a chup1 mutant background and cytoskeletal inhibitor experiments showed that the coiled-coil region of CHUP1 anchors chloroplasts firmly on the plasma membrane, consistent with the localization of coiled-coil GFP on the plasma membrane. Thus, CHUP1 localization on chloroplasts, with the N terminus inserted into the chloroplast outer envelope and the C terminus facing the cytosol, is essential for CHUP1 function, and the coiled-coil region of CHUP1 prevents chloroplast aggregation and participates in chloroplast relocation movement.