Soil water uptake by roots is a key component of plant performance and adaptation to adverse environments. Here, we use a genome-wide association analysis to identify the XYLEM NAC DOMAIN 1 (XND1) transcription factor as a negative regulator of Arabidopsis root hydraulic conductivity (Lpr). The distinct functionalities of a series of natural XND1 variants and a single nucleotide polymorphism that determines XND1 translation efficiency demonstrate the significance of XND1 natural variation at species-wide level. Phenotyping of xnd1 mutants and natural XND1 variants show that XND1 modulates Lpr through action on xylem formation and potential indirect effects on aquaporin function and that it diminishes drought stress tolerance. XND1 also mediates the inhibition of xylem formation by the bacterial elicitor flagellin and counteracts plant infection by the root pathogen Ralstonia solanacearum. Thus, genetic variation at XND1, and xylem differentiation contribute to resolving the major trade-off between abiotic and biotic stress resistance in Arabidopsis.