Rice factory seedling nursery is a technology that may greatly benefit the Chinese agriculture. It can improve the productivity of rice tray nursing seedlings planter, simplify the cultivation procedure and requirement, and reduce the labor intensity of manual planting. However, one technical drawback of this technology is that the current automatic tray feeder suffers from significant vibration shock and unstable reliability of automatic tray feeder. A composite tray which can be fitted with soft plastic trays and an automatic traysupplying apparatus for rice tray nursing seedlings planter was developed. The control system was based on the STM32 microcontroller, the trays were detected by a proximity switch, and the servo steering shaft mechanism was used to automatically lift and drop the tray. Through theoretical analysis, the force model for the embedded composite tray was established, and the working parameters of the composite tray were determined. Key components such as the reel shaft mechanism, the lifting finger and the conveying device were designed. For analyzing the performance of the automatic tray feeder and discovering of the main factor of the tray feeding success rate, an orthogonal trial experiment was carried out by using the hard tray, and the tray feeding success rate was used as the experimental index. The orthogonal experiment showed that the tray stacking deviation had significant influence on tray feeding success rate, while the productivity and the tray feeding rate were nonsignificant. In addition, according to analyzing the experimental data, the automatic tray feeder was improved. Individually, two single factor experiments were carried out which regarded tray feeding success rate as experimental index. One experiment used the hard tray as experimental subject and the other one used soft plastic tray with the embedded composite tray as the experimental subject. Experimental results showed that the improved automatic tray feeder achieved high performance, the rate of hard tray feeding success was 100% and that of the soft plastic tray with the embedded composite tray was more than 98%. The automatic tray feeder can effectively raise productivity and reduce labor intensity, and the experimental indexes met the using requirements of rice tray nursing seedlings planter.