Lysophosphatidyl acyltransferase (LPAAT) is a pivotal enzyme controlling the metabolic flow of lysophosphatidic acid into different phosphatidic acids in diverse tissues. A search of the Arabidopsis genome database revealed five genes that could encode LPAAT-like proteins. We identified one of them, LPAAT1, to be the lone gene that encodes the plastid LPAAT. LPAAT1 could functionally complement a bacterial mutant that has defective LPAAT. Bacteria transformed with LPAAT1 produced LPAAT that had in vitro enzyme activity much higher on 16:0-coenzyme A than on 18:1-coenzyme A in the presence of 18:1-lysophosphatidic acid. LPAAT1 transcript was present in diverse organs, with the highest level in green leaves. A mutant having a T-DNA inserted into LPAAT1 was identified. The heterozygous mutant has no overt phenotype, and its leaf acyl composition is similar to that of the wild type. Selfing of a heterozygous mutant produced normal-sized and shrunken seeds in the Mendelian ratio of 3:1, and the shrunken seeds could not germinate. The shrunken seeds apparently were homozygous of the T-DNA-inserted LPAAT1, and development of the embryo within them was arrested at the heart-torpedo stage. This embryo lethality could be rescued by transformation of the heterozygous mutant with a 35S:LPAAT1 construct. The current findings of embryo death in the homozygous knockout mutant of the plastid LPAAT contrasts with earlier findings of a normal phenotype in the homozygous mutant deficient of the plastid glycerol-3-phosphate acyltransferase; both mutations block the synthesis of plastid phosphatidic acid. Reasons for the discrepancy between the contrasting phenotypes of the two mutants are discussed.