Ulmus pumila ‘Jinye’, the colorful leaf mutant of Ulmus pumila L., is widely used in landscaping. In common with most leaf color mutants, U. pumila ‘Jinye’ exhibits growth inhibition. In this study, U. pumila L. and U. pumila ‘Jinye’ were used to elucidate the reasons for growth inhibition at the physiological, cellular microstructural, and transcriptional levels. The results showed that the pigment (chlorophyll a, chlorophyll b, and carotenoids) content of U. pumila L. was higher than that of U. pumila ‘Jinye’, whereas U. pumila ‘Jinye’ had a higher proportion of carotenoids, which may be the cause of the yellow leaves. Examination of the cell microstructure and RNA sequencing analysis showed that the leaf color and growth inhibition were mainly due to the following reasons: first, there were differences in the structure of the thylakoid grana layer. U. pumila L. has a normal chloroplast structure and clear thylakoid grana slice layer structure, with ordered and compact thylakoids. However, U. pumila ‘Jinye’ exhibited the grana lamella stacking failures and fewer thylakoid grana slice layers. As the pigment carrier and the key location for photosynthesis, the close stacking of thylakoid grana could combine more chlorophyll and promote efficient electron transfer promoting the photosynthesis reaction. In addition, U. pumila ‘Jinye’ had a lower capacity for light energy absorption, transformation, and transportation, carbon dioxide (CO2) fixation, lipopolysaccharide biosynthesis, auxin synthesis, and protein transport. The genes related to respiration and starch consumption were higher than those of U. pumila L., which indicated less energy accumulation caused the growth inhibition of U. pumila ‘Jinye’. Finally, compared with U. pumila ‘Jinye’, the transcription of genes related to stress resistance all showed an upward trend in U. pumila L. That is to say, U. pumila L. had a greater ability to resist adversity, which could maintain the stability of the intracellular environment and maintain normal progress of physiological metabolism. However, U. pumila ‘Jinye’ was more susceptible to changes in the external environment, which affected normal physiological metabolism. This study provides evidence for the main cause of growth inhibition in U. pumila ‘Jinye’, information for future cultivation, and information on the mutation mechanism for the breeding of colored leaf trees.