Control over the equilibrium between cell division and cell differentiation represents the core developmental regulation across all kingdoms. Plant hormones cytokinins (CKs) and CK-regulated sensor histidine kinases were shown to regulate the process of cell differentiation in both the shoot and root. However, the molecular mechanism of CK-controlled cell differentiation is far from being understood. We found that impaired CK signalling or biosynthesis leads to formation of vascular bundles with changed protoxylem/metaxylem ratio and dramatically reduced water conductance. Increased lignification in both tracheary elements (TEs) and xylem fibers suggested disturbed cell differentiation. The genome-wide next-gen transcriptional profiling revealed upregulation throughout the hierarchical cascade of transcriptional regulations including the NAC TFs NST1 and SND1/NST3, the master transcriptional switches of secondary cell wall (SCW) formation acting at the top of the cascade. That leads to precocious activation of downstream structural components mediating the biosynthesis of xylan, lignin and cellulose, the main compounds of the SCW. Using promoter:GUS lines, complementation of CK biosynthetic mutants by exogenous CK application and manipulation of endogenous CK via CYTOKININ OXIDASE/DEHYDROGENASE overexpression we have proven that CKs control proper cell differentiation rate via negative control over NST1 and NST3. Altogether our data provide mechanistic framework describing the role of CKs as principal regulators of cell differentiation program in plants.