Lagerstroemia indica is a popular woody ornamental plant throughout the world. However, relatively little is known about the molecular processes regulating leaf color in L. indica compared with other ornamental plants. Although yellow leaf mutants from various organisms have been well characterized, L. indica yellow leaf mutant has not yet been reported. In this study, a L. indica yellow leaf mutant, named YL03, was characterized and its leaf transcriptome was sequenced. A total of 30,712,752 reads were generated and assembled de novo into 45,308 unigenes with an average length of 987.51 bp. Among these unigenes, 21,339 (47.10 %) were identified as putative homologs of annotated sequences in public databases. A total of 79 unigenes involved in chlorophyll biosynthesis and degradation, photosynthesis and chloroplast development were identified. The expression levels of those genes were detected using quantitative real-time PCR in this study. Among those genes, 11 unigenes showed highly significant difference in the mutant compared to wild type plants. Conclusively, the leaf color formation is greatly affected by the activity of chloroplast development and chlorophyll metabolism. And the possible formation pathway of yellow leaf mutant is deduced based on our results.