<p>Alfalfa (<i>Medicago sativa</i> L.) is a globally important forage legume and the most widely cultivated sown pasture species in China. Drought, as one of the most common abiotic stresses, limits alfalfa growth and development. Nitric oxide (NO), a key signaling molecule, plays an essential role in plant growth, development, and responses to various abiotic stresses. In this study, exogenous NO was applied to alfalfa seedlings under drought stress, followed by physiological and transcriptomic analyses. The results showed that sodium nitroprusside (SNP)-treated alfalfa seedlings grew better than untreated controls (CK), with improved leaf tissue structure. Meanwhile, SNP treatment increased proline content, reduced malondialdehyde accumulation, and enhanced hydroxyl radical scavenging capacity. Under drought stress, lignin content increased in alfalfa seedlings. Following exogenous NO application, lignin content in alfalfa seedlings further increased. RNA-Seq analysis identified 20,183 differentially expressed genes (DEGs) in alfalfa seedlings treated with PEG, SNP, or PEG + SNP. KEGG enrichment analysis indicated that the DEGs under drought stress were involved in the phenylpropanoid biosynthesis pathway, which regulates lignin biosynthesis and enhances drought tolerance. GO enrichment analysis revealed that these DEGs participated in the response to water deprivation, thereby modulating drought stress tolerance and improving drought resistance. Furthermore, we assessed the transcript-level changes in genes induced by phenylpropanoid biosynthesis in alfalfa. Among them, 124 DEGs were identified as participating in phenylpropanoid biosynthesis, including 10 up-regulated DEGs (three of which encode key enzymes associated with lignin synthesis), while the remaining DEGs were down-regulated. These findings provide new insights into the transcriptomic mechanisms of SNP-mediated drought adaptation in alfalfa and reveal key pathways contributing to drought tolerance in this species.</p>