Background: Mutant analysis remains one of the main genetic tools for characterising unclarified gene functions in plants, especially in non-model plants. Daylily (Hemerocallis spp.) is a popular perennial ornamental plant grown worldwide. Analysis of daylily mutants can enhance understanding of genes regulating the albino phenotype and improve the cultivar quality of daylily. Methods: The natural albino mutant (Alb{}^{-/-}) was isolated by screening a self-pollinated progeny of daylily cultivar ‘black-eyed stella’. Transmission electron microscopy was used in analysing the structure of plastids between mutant and wild-type seedlings. The content of chlorophyll, carotenoids and chlorophyll precursors in plants was measured by ultraviolet spectrophotometry. RNA sequencing and physiological measurements were performed to explore the association between drought tolerance and mutation. Results: All the seedlings of the daylily albino mutants died spontaneously within fifteen days after germination when grown in soil. The carotenoid and chlorophyll content in the leaves of the mutant plants significantly decreased compared with those of the wild-type control. The mutant plants displayed stunted growth, and their leaves were white or light yellow in color. Abnormal plastids such as those showing endomembrane vesiculation and lacking stacking were discovered in the leaves of mutant plants. Furthermore, genetic analysis revealed that a single recessive nuclear gene mutation led to the albino trait, RNA sequencing and real-time quantitative PCR validation showed extensive differences in gene expression between the mutant plants and the wild-type control, and most of the genes related to chlorophyll metabolism were down-regulated, with foldchange ranging from 0.20–0.49. Additionally, the surviving homozygous plants (Alb{}^{+/+}), which do not contain this mutation, were also isolated by analysing the phenotype of their self-pollinated progeny. The net photosynthesis rate and light saturation point of Alb{}^{+/+} were higher than those of heterozygous (Alb{}^{+/-}) plants. Additionally, the Alb{}^{+/+} plants were more tolerant to drought conditions than the Alb{}^{+/-} plants, suggesting that a heterozygous Alb{}^{-} mutation is sufficient to negatively affect photosynthetic efficiency and drought tolerance. Conclusions: The albino mutation negatively affects photosynthetic efficiency and drought tolerance, and homozygous mutation is required for the characteristic albino phenotype. This work highlights the link between albino mutation, photosynthetic pigment metabolism and drought sensitivity in daylily.