Nitrogen (N) is a main nutrient required for tree growth and biomass accumulation. In this study, we analyzed the effects of contrasting nitrogen fertilization treatments on the phenotypes of fast growing Eucalyptus hybrids (E. urophylla x E. grandis) with a special focus on xylem secondary cell walls and global gene expression patterns. Histological observations of the xylem secondary cell walls further confirmed by chemical analyses showed that lignin was reduced by luxuriant fertilization, whereas a consistent lignin deposition was observed in trees grown in N-limiting conditions. Also, the syringyl/guaiacyl (S/G) ratio was significantly lower in luxuriant nitrogen samples. Deep sequencing RNAseq analyses allowed us to identify a high number of differentially expressed genes (1,469) between contrasting N treatments. This number is dramatically higher than those obtained in similar studies performed in poplar but using microarrays. Remarkably, all the genes involved the general phenylpropanoid metabolism and lignin pathway were found to be down-regulated in response to high N availability. These findings further confirmed by RT-qPCR are in agreement with the reduced amount of lignin in xylem secondary cell walls of these plants. This work enabled us to identify, at the whole genome level, xylem genes differentially regulated by N availability, some of which are involved in the environmental control of xylogenesis. It further illustrates that N fertilization can be used to alter the quantity and quality of lignocellulosic biomass in Eucalyptus, offering exciting prospects for the pulp and paper industry and for the use of short coppices plantations to produce second generation biofuels.