Nitric oxide (NO) is a gaseous reactive oxygen species (ROS) that has evolved as a signaling hormone in many physiological processes in animals. In plants it has been demonstrated to be a crucial regulator of development, acting as a signaling molecule present at each step of the plant life cycle. NO has also been implicated as a signal in biotic and abiotic responses of plants to the environment. Remarkably, despite this plethora of effects and functional relationships, the fundamental knowledge of NO production, sensing, and transduction in plants remains largely unknown or inadequately characterized. In this review we cover the current understanding of NO production, perception, and action in different physiological scenarios. We especially address the issues of enzymatic and chemical generation of NO in plants, NO sensing and downstream signaling, namely the putative cGMP and Ca2+ pathways, ion-channel activity modulation, gene expression regulation, and the interface with other ROS, which can have a profound effect on both NO accumulation and function. We also focus on the importance of NO in cell–cell communication during developmental processes and sexual reproduction, namely in pollen tube guidance and embryo sac fertilization, pathogen defense, and responses to abiotic stress.