Most legume plants can associate with diazotrophic soil bacteria called rhizobia, resulting in new root organs called nodules that enable N2 fixation. Nodulation is an energy-consuming process, and nodule number is tightly regulated by independent systemic signaling pathways controlled by CLE/SUNN and CEP/CRA2. Moreover, nitrate inhibits legume nodulation via local and systemic regulatory pathways. In Medicago truncatula, NLP1 plays important roles in nitrate-induced inhibition of nodulation, but the relationship between systemic and local pathways in mediating nodulation inhibition by nitrate is poorly understood. In this study, we found that nitrate induces CLE35 expression in an NLP1-dependent manner and that NLP1 binds directly to the CLE35 promoter to activate its expression. Grafting experiments revealed that the systemic control of nodule number involves negative regulation by SUNN and positive regulation by CRA2 in the shoot, and that NLP1's control of the inhibition of rhizobial infection, nodule development, and nitrogenase activity in response to nitrate is determined by the root. Unexpectedly, grafting experiments showed that loss of CRA2 in the root increases nodule number at inhibitory nitrate levels, probably because of CEP1/2 upregulation in the cra2 mutants, suggesting that CRA2 exerts active negative feedback regulation in the root.