BACKGROUND: Chloroplasts are important semi-autonomous organelles in plants and algae. Unlike higher plants, the chloroplast genomes of green algal linage have distinct features both in organization and expression. Despite the architecture of chloroplast genome having been extensively studied in higher plants and several model species of algae, little is known about the transcriptional features of green algal chloroplast-encoded genes. RESULTS: Based on full-length cDNA (Iso-Seq) sequencing, we identified widely co-transcribed polycistronic transcriptional units (PTUs) in the green alga Caulerpa lentillifera. In addition to clusters of genes from the same pathway, we identified a series of PTUs of up to nine genes whose function in the plastid is not understood. The RNA data further allowed us to confirm widespread expression of fragmented genes and conserved open reading frames, which are both important features in green algal chloroplast genomes. In addition, a newly fragmented gene specific to C. lentillifera was discovered, which may represent a recent gene fragmentation event in the chloroplast genome. With the newly annotated exon-intron boundary information, gene structural annotation was greatly improved across the siphonous green algae lineages. Our data also revealed a type of non-canonical Group II introns, with a deviant secondary structure and intronic ORFs lacking known splicing or mobility domains. These widespread introns have conserved positions in their genes and are excised precisely despite lacking clear consensus intron boundaries. CONCLUSION: Our study fills important knowledge gaps in chloroplast genome organization and transcription in green algae, and provides new insights into expression of polycistronic transcripts, freestanding ORFs and fragmented genes in algal chloroplast genomes. Moreover, we revealed an unusual type of Group II intron with distinct features and conserved positions in Bryopsidales. Our data represents interesting additions to knowledge of chloroplast intron structure and highlights clusters of uncharacterized genes that probably play important roles in plastids.