There are numerous exchanges of signals and materials between leaves and roots, including nitrogen, which is one of the essential nutrients for plant growth and development. In this study we identified and characterized the Chlorophyll A/B-Binding Protein (CAB) (named coe2 for CAB overexpression 2) mutant, which is defective in the development of chloroplasts and roots under normal growth conditions. The phenotype of coe2 is caused by a mutation in the Nitric Oxide Associated (NOA1) gene that is implicated in a wide range of chloroplast functions including the regulation of metabolism and signaling of nitric oxide (NO). A transcriptome analysis reveals that expression of genes involved in metabolism and lateral root development are strongly altered in coe2 seedlings compared with WT. COE2 is expressed in hypocotyls, roots, root hairs, and root caps. Both the accumulation of NO and the growth of lateral roots are enhanced in WT but not in coe2 under nitrogen limitation. These new findings suggest that COE2-dependent signaling not only coordinates gene expression but also promotes chloroplast development and function by modulating root development and absorption of nitrogen compounds.