α-Amylases are glucan hydrolases that cleave α-1,4-glucosidic bonds in starch. In vascular plants, α-amylases can be classified into three subfamilies. Arabidopsis has one member of each subfamily. Among them, only AtAMY3 is localized in the chloroplast. We expressed and purified AtAMY3 from Escherichia coli and carried out a biochemical characterization of the protein to find factors that regulate its activity. Recombinant AtAMY3 was active toward both insoluble starch granules and soluble substrates, with a strong preference for β-limit dextrin over amylopectin. Activity was shown to be dependent on a conserved aspartic acid residue (Asp666), identified as the catalytic nucleophile in other plant α-amylases such as the barley AMY1. AtAMY3 released small linear and branched glucans from Arabidopsis starch granules, and the proportion of branched glucans increased after the predigestion of starch with a β-amylase. Optimal rates of starch digestion in vitro was achieved when both AtAMY3 and β-amylase activities were present, suggesting that the two enzymes work synergistically at the granule surface. We also found that AtAMY3 has unique properties among other characterized plant α-amylases, with a pH optimum of 7.5–8, appropriate for activity in the chloroplast stroma. AtAMY3 is also redox-regulated, and the inactive oxidized form of AtAMY3 could be reactivated by reduced thioredoxins. Site-directed mutagenesis combined with mass spectrometry analysis showed that a disulfide bridge between Cys499 and Cys587 is central to this regulation. This work provides new insights into how α-amylase activity may be regulated in the chloroplast.