Thylakoid biogenesis is a crucial step for plant development involving the combined action of many cellular actors. CPSAR1 is shown here to be required for the normal organization of mature thylakoid stacks, and ultimately for embryo development. CPSAR1 is a chloroplast protein that has a dual localization in the stroma and the inner envelope membrane, according to microscopy studies and subfractionation analysis. CPSAR1 is close to the Obg nucleotide binding protein subfamily and displays GTPase activity, as demonstrated by in vitro assays. Disruption of the CPSAR1 gene via T-DNA insertion results in the arrest of embryo development. In addition, transmission electron microscopy analysis indicates that mutant embryos are unable to develop thylakoid membranes, and remain white. Unstacked membrane structures resembling single lamellae accumulate in the stroma, and do not assemble into mature thylakoid stacks. CPSAR1 RNA interference induces partially developed thylakoids leading to pale-green embryos. Altogether, the presented data demonstrate that CPSAR1 is a protein essential for the formation of normal thylakoid membranes, and suggest a possible involvement in the initiation of vesicles from the inner envelope membrane for the transfer of lipids to the thylakoids.