We previously showed that the VASCULAR-RELATED NAC-DOMAIN6 (VND6) and VND7 genes, which encode NAM/ATAF/CUC domain protein transcription factors, act as key regulators of xylem vessel differentiation. Here, we report a glucocorticoid-mediated posttranslational induction system of VND6 and VND7. In this system, VND6 or VND7 is expressed as a fused protein with the activation domain of the herpes virus VP16 protein and hormone-binding domain of the animal glucocorticoid receptor, and the protein's activity is induced by treatment with dexamethasone (DEX), a glucocorticoid derivative. Upon DEX treatment, transgenic Arabidopsis (Arabidopsis thaliana) plants carrying the chimeric gene exhibited transdifferentiation of various types of cells into xylem vessel elements, and the plants died. Many genes involved in xylem vessel differentiation, such as secondary wall biosynthesis and programmed cell death, were up-regulated in these plants after DEX treatment. Chemical analysis showed that xylan, a major hemicellulose component of the dicot secondary cell wall, was increased in the transgenic plants after DEX treatment. This induction system worked in poplar (Populus tremula x tremuloides) trees and in suspension cultures of cells from Arabidopsis and tobacco (Nicotiana tabacum); more than 90% of the tobacco BY-2 cells expressing VND7-VP16-GR transdifferentiated into xylem vessel elements after DEX treatment. These data demonstrate that the induction systems controlling VND6 and VND7 activities can be used as powerful tools for understanding xylem cell differentiation.