Argon-ion beam is an effective mutagen capable of inducing a variety of mutation types. In this study, an argon ion-induced pale green mutant of Arabidopsis thaliana was isolated and characterized. The mutant, designated Ar50-33-pg1, exhibited moderate defects of growth and greening and exhibited rapid chlorosis in photosynthetic tissues. Fluorescence microscopy confirmed that mesophyll chloroplasts underwent substantial shrinkage during the chlorotic process. Genetic and whole-genome resequencing analyses revealed that Ar50-33-pg1 contained a large 940 kb deletion in chromosome V that encompassed more than 100 annotated genes, including 41 protein-coding genes such as TYRAAt1/TyrA1, EGY1, and MBD12. One of the deleted genes, EGY1, for a thylakoid membrane-localized metalloprotease, was the major contributory gene responsible for the pale mutant phenotype. Both an egy1 mutant and F1 progeny of an Ar50-33-pg1 × egy1 cross-exhibited chlorotic phenotypes similar to those of Ar50-33-pg1. Furthermore, ultrastructural analysis of mesophyll cells revealed that Ar50-33-pg1 and egy1 initially developed wild type-like chloroplasts, but these were rapidly disassembled, resulting in thylakoid disorganization and fragmentation, as well as plastoglobule accumulation, as terminal phenotypes. Together, these data support the utility of heavy-ion mutagenesis for plant genetic analysis and highlight the importance of EGY1 in the structural maintenance of grana in mesophyll chloroplasts.