Photochemical phase, also called light or Hill  reaction, occurs inside the thylakoids, especially those of grana region. Photochemical step is dependent upon light .The function of this phase is to produce assimilatory power consisting of reduced coenzyme NADPH and energy rich ATP molecules. 

The process by which ATP is sysnthesised by cells in mitochondria and chloroplasta is named as phosphorylation. Photophosphorylation is the synthesis of ATP from ADP and inorganic phosphate (Pi) in the presence of light, inside chloroplast. Photosphosphorylation is of two main types-Cyclic and non-cyclic photophosphorylation.

The complete process of photosynthesis is studied under two phases-photochemical phae and biosynthetic phase. Photochemical phas involves absorpiton of light energy, photolysis of water with the release of O₂ and production of assimiliatory power (i.e., ATP + NADPH). CO₂ fixation occurs during biosynthetic phase photosynthesis.

The reaction centre of photosystem I (PS I) is referred to as P₇₀₀ where "P" stands for "Pigment" and "700" stands for the wavelenght of light that this particular chlorophyll molecule absorbs most strongly. The reaction centre of photosystem II (PS II) is referred to as P₆₈₀ for comparable reason.

During Z- scheme, the electron extrucded by PS I passes through special chlorophyll X, Fe-S, ferredoxin, to finally reach NADP+,NADP⁺ is ultimately reduced by combining with H⁺ (released during photolysis) with the help of NADP⁺ reductase enzyme.

In non cyclic photophosphorylation, the whole scheme of transfer of electrons, starting from the PSII, uphill to the acceptor, down the electron transport chain to PSI, excitation of electrons, transfer to another acceptor, and finally down hill to NADP⁺ causing it to be reduced to NADPH + H⁺ is called as the Z scheme, due to its characteristic shape. This shape is formed when all the carriers are placed in a sequence on the redox potential scale.

PSI is involved in both cyclic and non-cyclic photophosphorylation PS II is involved only in non-cyclic photophosphorylation PS II is present in the aprressed (inner) part of grana thylakoids, PS I is located in the non-appressed (outer) part of grana thylakoids as well as stroma thylakoids

The given figure shows the light-harvesting complex of PS I the unidentified elements are as follows: A- PS I, B- electron acceptor, and C-P₇₀₀ ​

The splitting of water is associated with the PSII, water is split into H+,[O] and electrons. The needed to replace those removed from photosystem I are provided by photosystem II.
2H_2​O → 4H⁺ + O₂ ​+ 4e⁻
Water splitting complex is associated with the PSII, which itself physically located on the inner side of the membrane of are thylakoid.

The phenomenon of breaking up of water into hydrogen and oxygen in the illuminated chloroplasts is called photolysis or photocatalytic splitting of water. It can be depicted as: 4H₂​O ⇌ 4H⁺ + 4OH⁻

Non-cydic photophosphorylation is the normal process of photophosphorylation in which the electron expelled by the excited photocentre does not return to it. Non- cydic photophosphorylation is carried out in collaboration of both photosystems I and II. Electron released during photolysis of H₂O is picked up by photocentre of PSII called P₆₈₀. The same is extruded out when the photocentre absorbs light energy (hv). Electrons released during the photolysis of water are immediately accepted by oxidised reaction centre of PSII (i.e., P₆₈₀) through an unknown substance Z.

Chemiosmotic hypothesis for the synthesis of ATP was proposed by Peter Mitchell, 1961 (Nobel Prize in 1978). ATP synthesis is linked to the development of proton gradient across a membrane, which occurs in both photosynthesis is well as respiration.The difference between the two processes is that during photosynthesis, proton accumulation take place in the thylakoid lumen; whereas during respiration protons accumulate in the intermembranal space of mitochondria when electrons move through the ETS.

If thylakoid is punctured, then the interior of the thylakoid is no longer separated from the stroma and this leads to stoppage of ATP synthesis.

Chemiosmosis is the movement of ions across a semipermeable membrane, down their electrochemical gradient.
A represents the thylakoid lumen, b-F_o & c-F₁.

In cyclic photophosphorylation, an electron expelled by the excited photocentre (P₇₀₀) is returned to it after passing through a series of electron carriers. Its photocentre P₇₀₀ extrudes an electron with a gain of 23kcal/mole of energy after absorbing a photon of light (hv). After losing the electron the photocentre becomes oxidised. The expelled electron passes through a series of carriers including X or A₀ (a special P₇₀₀ chlorophyll molecule), A₁, (a quinone), FeS complexes (F_eS_x,F_eS_A,F_eS_B), ferredoxin (Fd), plastoquinone (PQ), cytochrome b−f complex and plastocyanin (PC) before returning to photocentre. While over the cytochrome complex, the electron energises passage of protons to create a proton gradient for synthesis of ATP form ADP and inorganic phosphate.