Nitric oxide (NO) is known to be involved in modulating production of styrylpyrone polyphenols in the basidiomycete Inonotus obliquus. However, it remains unknown how NO orchestrates fungal styrylpyrone biosynthesis. Here, we show that a transient NO burst correlated with an enhanced expression of phenylalanine ammonia lyase (PAL), 4-coumarate CoA ligase (4CL), and styrylpyrone synthase (SPS), the key enzymes involved in styrylpyrone biosynthesis, and subsequently an increased production of styrylpyrone polyphenols. In parallel, the NO burst also resulted in S-nitrosylation of PAL, 4CL, and SPS, which compromised their enzymatic activities mediating a post-translational feedback mechanism that keeps NO-dependent transcriptional activation in check. Moreover, dysfunction of thioredoxin reductase (TrxR) further increased the formation of S-nitrosylated proteins, implicating the significance of the Trx system in maintaining a low level of protein-nitrosothiols. Three thioredoxin-like proteins (TrxLs) from I. obliquus show in vitro denitrosylation potential toward S-nitrosylated proteins via trans-denitrosylation or mixed disulfide intermediates. Thus, S-nitrosylation triggered by the NO burst limits over production of fungal styrylpyrone polyphenols, and denitrosylation by TrxLs that act in concert with TrxR play a key role in maintaining redox balance and orchestrating catalytic activities of the enzymes engaged in styrylpyrone synthetic metabolism.