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The scutellum, coleoptile, coleorhiza, and epiblast (if it exists) consist of a complex embryonic envelope to protect the plumule and radicle inside a grass embryo. Controversies have been provoked for centuries regarding homologies of the grass embryonic structures. Here we found that the rice LEAFY COTYLEDONE1 (LEC1) gene, OsNF-YB7, is vital for embryo development. A leaf-like structure (LL) was developed from the scutellum of osnf-yb7 to replace the embryonic envelope that formed in wild-type. Additionally, osnf-yb7 developed chloroembryos due to overactivated chlorophyll biosynthesis. Thus, OsNF-YB7 likely plays a dual role in chlorophyll biogenesis in rice embryos: (1) OsNF-YB7 directly represses genes, such as rice GOLDED-LIKE1 (OsGLK1), involving chlorophyll biosynthesis; (2) OsNF-YB7 binds to OsGLK1 to repress the downstream genes of OsGLK1. Parallel phenotypes shown in osnf-yb7 and lec1 suggest functional conservation of the LEC1-type genes in plants. Both lec1 cotyledons and osnf-yb7 LL displayed true leaf characteristics. Our morphological and transcriptional evidence implied that LL replaces the embryonic envelope in osnf-yb7, raising the hypothesis that the grass embryonic envelope is an analog of Arabidopsis cotyledon. This study demonstrates that OsNF-YB7 acts as a negative regulator in chlorophyll biogenesis and is important for embryonic envelope formation.