The emergence of coordinated network function during nervous system development is often associated with critical periods. These phases are sensitive to activity perturbations during, but not outside, of the critical period, that can lead to permanently altered network function for reasons that are not well understood. In particular, the mechanisms that transduce neuronal activity to regulating changes in neuronal physiology or structure are not known. Here, we take advantage of a recently identified invertebrate model for studying critical periods, the Drosophila larval locomotor system. Manipulation of neuronal activity during this critical period is sufficient to increase synaptic excitation and to permanently leave the locomotor network prone to induced seizures. Using genetics and pharmacological manipulations, we identify nitric oxide (NO)-signaling as a key mediator of activity. Transiently increasing or decreasing NO-signaling during the critical period mimics the effects of activity manipulations, causing the same lasting changes in synaptic transmission and susceptibility to seizure induction. Moreover, the effects of increased activity on the developing network are suppressed by concomitant reduction in NO-signaling and enhanced by additional NO-signaling. These data identify NO signaling as a downstream effector, providing new mechanistic insight into how activity during a critical period tunes a developing network.