The yellow-green leaf mutation has an important effect on yield and quality of rice. It is deeply significant to study the mechanism of yellow-green leaf mutation for superior varieties with high photosynthetic efficiency and increasing yield bred in rice. In this study, a yellow-green leaf mutant w08(YGL), obtained by ethylmethylsulfone (EMS) mutagenesis from japonica variety Yunyin, was used to study the effect of leaf color mutation on main agronomic characters, chlorophyll content, photosynthetic parameters, physiological and submicroscopic structure for rice, and genetic analysis, gene mapping and functional confirm of the mutant were performed. The results indicated that the mutant was yellow-green leaves during the whole growth period. Compared with wild type Yunyin (YY), effective spike per plant, maturing rate and 1000-grain weight of mutant w08 were decreased 46.7%, 50.13% and 18.31%, respectively, the contents of chlorophyll a, chlorophyll b and carotenoid of mutant w08 were decreased 41.16%, 98.74% and 17.52%, respectively. The results of photosynthetic rate indicated that the net photosynthetic rate (Pn) of the mutant was decreased, while intercellular CO2 (Ci) was increased. The chloroplast ultrastructure of the mutant showed that the number of thylakoid grana lamella in chloroplast was decreased significantly. The genetic analysis showed that the trait for yellow-green leaf of mutant was inherited by a single gene, controlled by a pair of recessive nuclear gene. An F-2 population was constructed derived from the crossing between the mutant and Lemont, and the gene was mapped between the markers of GL8 and T258 on the long arm of chromosome 10 with a physical distance of 60.2 kb, which contained 14 candidate genes in the region. The results of gene sequencing indicated that there was a mutation in the 957th base of CDS sequence of OsCAO1, a candidate gene encoding chlorophyllidea oxygenase1 protein, formed a stop codon, leading to the premature termination of protein translation function. The construct of the overexpression and knockout vectors were transformed to the mutant and the wild type for gene function complementarity and gene knockout verification mediated with Agrobacterium, respectively. The results indicated that the leaf color of the mutant was returned to the green phenotype of the normal wild type, and the wild type mutated to the yellow-green leaf phenotype, furtherly confirmed the function of OsCAO1 gene. The expression of chlorophyll synthesis and degradation-related genes in the wild type and mutant was detected. The expression level of chlorophyll synthesis-related genes OsCAO1 was significantly decreased in the mutant, and the expression level of chlorophyll degradation-related genes OsNYC3, OsPAO and OsCCR1 were also significantly decreased in the mutant, indicating that the decrease of chlorophyll in the mutant was caused by the inhibition of chlorophyll synthesis induced by OsCAO1 mutation. The hormone content and the expression of tiller regulation genes were analyzed in the mutant, and the results revealed that the expression levels of tiller-related genes and auxin synthesis genes were outstanding decreased in the mutant, and the auxin content in tiller buds of rice was significantly increased, confirmed that OsCAO1 gene mutation inhibited tillering growth of rice and significantly reduced effective panicles per plant.