Although nitric oxide (NO) signaling promotes differentiation and maturation of endothelial progenitor cells, its role in the differentiation of mesenchymal stem cells (MSCs) into endothelial cells remains controversial. We tested the role of NO signaling in MSCs derived from WT mice and mice homozygous for a deletion of S-nitrosoglutathione reductase (GSNOR(-/-)), a denitrosylase that regulates S-nitrosylation. GSNOR(-/-) MSCs exhibited markedly diminished capacity for vasculogenesis in an in vitro Matrigel tube-forming assay and in vivo relative to WT MSCs. This decrease was associated with down-regulation of the PDGF receptorα (PDGFRα) in GSNOR(-/-) MSCs, a receptor essential for VEGF-A action in MSCs. Pharmacologic inhibition of NO synthase with L-N(G)-nitroarginine methyl ester (L-NAME) and stimulation of growth hormone-releasing hormone receptor (GHRHR) with GHRH agonists augmented VEGF-A production and normalized tube formation in GSNOR(-/-) MSCs, whereas NO donors or PDGFR antagonist reduced tube formation ∼50% by murine and human MSCs. The antagonist also blocked the rescue of tube formation in GSNOR(-/-) MSCs by L-NAME or the GHRH agonists JI-38, MR-409, and MR-356. Therefore, GSNOR(-/-) MSCs have a deficient capacity for endothelial differentiation due to downregulation of PDGFRα related to NO/GSNOR imbalance. These findings unravel important aspects of modulation of MSCs by VEGF-A activation of the PDGFR and illustrate a paradoxical inhibitory role of S-nitrosylation signaling in MSC vasculogenesis. Accordingly, disease states characterized by NO deficiency may trigger MSC-mediated vasculogenesis. These findings have important implications for therapeutic application of GHRH agonists to ischemic disorders.