Summary Long noncoding RNAs (lncRNAs) are crucial regulators in many plant biological processes. However, it remains unknown whether lncRNAs can respond to nitrate or function in nitrate regulation. We detected 695 lncRNAs, 480 known and 215 novel, in Arabidopsis seedling roots; six showed altered expression in response to nitrate treatment, among which T5120 showed the highest induction. Overexpression of T5120 in Arabidopsis promoted the response to nitrate, enhanced nitrate assimilation and improved biomass and root development. Biochemical and molecular analyses revealed that NLP7, a master nitrate regulatory transcription factor, directly bound to the nitrate‐responsive cis‐element (NRE)‐like motif of the T5120 promoter and activated T5120 transcription. In addition, T5120 partially restored the nitrate signalling and assimilation phenotypes of nlp7 mutant, suggesting that T5120 is involved in NLP7‐mediated nitrate regulation. Interestingly, the expression of T5120 was regulated by the nitrate sensor NRT1.1. Therefore, T5120 is modulated by NLP7 and NRT1.1 to regulate nitrate signalling. Our work reveals a new regulatory mechanism in which lncRNA T5120 functions in nitrate regulation, providing new insights into the nitrate signalling network. Importantly, lncRNA T5120 can promote nitrate assimilation and plant growth to improve nitrogen use efficiency.