We characterized the physiological functions of Nicotiana benthamiana Chloroplast Envelope Protein 1 (NbCEP1) in Nicotiana benthamiana. NbCEP1 contains a chloroplast transit peptide and a single transmembrane domain at the N terminus, and most of its protein coding region is comprised of 15 leucine-rich-repeats (LRRs). The NbCEP1 gene is expressed in both aerial and underground plant tissues, and is induced by light. A GFP fusion protein of full length NbCEP1 was targeted to the chloroplast envelope and co-localized with OEP7:RFP, a marker protein for the chloroplast envelope. A fusion protein consisting of GFP and the NbCEP1 transit peptide mainly localized in the chloroplast stroma. Reduction of NbCEP1 expression by virus-induced gene silencing resulted in a leaf yellowing phenotype without much affecting overall plant growth. At the cellular level, depletion of NbCEP1 severely influenced chloroplast development, reducing both the number and size of the chloroplasts. Interestingly, mitochondrial development was also impaired, possibly an indirect effect of chloroplast ablation. A deficiency in NbCEP1 activity decreased the chlorophyll and carotenoid levels. Our results suggest that NbCEP1 plays a critical function, possibly through protein-protein interactions mediated by its LRRs, in chloroplast development in N. benthamiana.