Downy mildew of pearl millet caused by the biotrophic oomycete Sclerospora graminicola is the most devastating disease which impairs pearl millet production causing huge yield and monetary losses. Chitosan nanoparticles (CNP) were synthesized from low molecular weight chitosan having higher degree of acetylation was evaluated for their efficacy against downy mildew disease of pearl millet caused by Sclerospora graminicola. Laboratory studies showed that CNP seed treatment significantly enhanced pearl millet seed germination percentage and seedling vigor compared to the control. Seed treatment with CNP induced systemic and durable resistance and showed significant downy mildew protection under greenhouse conditions in comparison to the untreated control. Seed treatment with CNP showed changes in gene expression profiles wherein expression of genes of phenylalanine ammonia lyase, peroxidase, polyphenoloxidase, catalase and superoxide dismutase were highly upregulated. CNP treatment resulted in earlier and higher expression of the pathogenesis related proteins PR1 and PR5. Downy mildew protective effect offered by CNP was found to be modulated by nitric oxide and treatment with CNP along with NO inhibitors cPTIO completely abolished the gene expression of defense enzymes and PR proteins. Further, comparative analysis of CNP with Chitosan revealed that the very small dosage of CNP performed at par with recommended dose of Chitosan for downy mildew management.