Post-translational modifications of proteins have important roles in the regulation of protein activity. One such modification, S-nitrosylation, involves the covalent binding of nitric oxide (NO)-related species to a cysteine residue. Recent work showed that protein S-nitrosylation has crucial functions in plant development and environmental responses. In the present study, we investigated the importance of protein S-nitrosylation for xylem vessel cell differentiation using a forward genetics approach. We performed ethyl methanesulfonate mutagenesis of a transgenic Arabidopsis 35S::VND7-VP16-GR line in which the activity of VASCULAR-RELATED NAC-DOMAIN7 (VND7), a key transcription factor involved in xylem vessel cell differentiation, can be induced post-translationally by glucocorticoid treatment, with the goal of obtaining suppressor mutants that failed to differentiate ectopic xylem vessel cells; we named these mutants suppressor of ectopic vessel cell differentiation induced by VND7 (seiv) mutants. We found the seiv1 mutant to be a recessive mutant in which ectopic xylem cell differentiation was inhibited, especially in aboveground organs. In seiv1 mutants, a single nucleic acid substitution (G to A) leading to an amino acid substitution (E36K) was present in the gene encoding S-NITROSOGLUTATHIONE REDUCTASE 1 (GSNOR1), which regulates the turnover of the natural NO donor, S-nitrosoglutathione. An in vitro S-nitrosylation assay revealed that VND7 can be S-nitrosylated at Cys264 and Cys320 located near the transactivation activity-related domains, which were shown to be important for transactivation activity of VND7 by transient reporter assay. Our results suggest crucial roles for GSNOR1-regulated protein S-nitrosylation in xylem vessel cell differentiation, partly through the post-translational modification of VND7.