The Arabidopsis CAO gene encodes a 52-kDa protein with predicted localization in the plastid compartment. Here, we report that CAO is an intrinsic Rieske iron-sulfur protein of the plastid-envelope inner and thylakoid membranes. Activity measurements revealed that CAO catalyzes chlorophyllide a to chlorophyllide b conversion in vitro and that the enzyme was only slightly active with protochlorophyllide a, the nonreduced precursor of chlorophyllide a. Protein import and organelle fractionation studies identified CAO to be distinct from Ptc52 in the substrate-dependent transport pathway of NADPH:protochlorophyllide oxidoreductase A but instead to be part of a separate translocon complex. This complex was involved in the regulated import and stabilization of the chlorophyllide b-binding light-harvesting proteins Lhcb1 (LHCII) and Lhcb4 (CP29) in chloroplasts. Together, our results provide insights into the plastid subcompartmentalization and evolution of chlorophyll precursor biosynthesis in relation to protein import in higher plants.