The crucial role of carbohydrate in plant growth and morphogenesis is widely recognized. In this study, we describe the characterization of nana, a dwarf Arabidopsis (Arabidopsis thaliana) mutant impaired in carbohydrate metabolism. We show that the nana dwarf phenotype was accompanied by altered leaf morphology and a delayed flowering time. Our genetic and molecular data indicate that the mutation in nana is due to a transfer DNA insertion in the promoter region of a gene encoding a chloroplast-located aspartyl protease that alters its pattern of expression. Overexpression of the gene (oxNANA) phenocopies the mutation. Both nana and oxNANA display alterations in carbohydrate content, and the extent of these changes varies depending on growth light intensity. In particular, in low light, soluble sugar levels are lower and do not show the daily fluctuations observed in wild-type plants. Moreover, nana and oxNANA are defective in the expression of some genes implicated in sugar metabolism and photosynthetic light harvesting. Interestingly, some chloroplast-encoded genes as well as genes whose products seem to be involved in retrograde signaling appear to be down-regulated. These findings suggest that the NANA aspartic protease has an important regulatory function in chloroplasts that not only influences photosynthetic carbon metabolism but also plastid and nuclear gene expression.