Xylan, a major polysaccharide in plant lignocellulosic biomass, is acetylated at O-2 and/or O-3 and its acetylation impedes the use of biomass for biofuel production. Currently, it is not known what genes encode acetyltransferases that are responsible for xylan O-acetylation. In this report, we demonstrate an essential role for the Arabidopsis gene ESKIMO1 (ESK1) in xylan O-acetylation during secondary wall biosynthesis. ESK1 expression was found to be regulated by the secondary wall master regulator SND1 (secondary wall-associated NAC domain protein1) and specifically associated with secondary wall biosynthesis. Its encoded protein was localized in the Golgi, the site of xylan biosynthesis. The esk1 mutation caused reductions in secondary wall thickening and stem mechanical strength. Chemical analyses of cell walls revealed that although the esk1 mutation did not cause apparent alterations in the xylan chain length and the abundance of the reducing end sequence, it resulted in a significant reduction in the degree of xylan acetylation. The reduced acetylation of esk1 xylan rendered it more accessible and digestible by endoxylanase, leading to generation of shorter xylooligomers compared with the wild type. Further structural analysis of xylan showed that the esk1 mutation caused a specific reduction in 2-O- and 3-O-monoacetylation of xylosyl residues but not in 2,3-di-O-acetylation or 3-O-acetylation of xylosyl residues substituted at O-2 with glucuronic acid. Consistent with ESK1’s involvement in xylan O-acetylation, an activity assay revealed that the esk1 mutation led to a significant decrease in xylan acetyltransferase activity. Together, these results demonstrate that ESK1 is a putative xylan acetyltransferase required for 2-O- and 3-O-monoacetylation of xylosyl residues and indicate the complexity of the biochemical mechanism underlying xylan O-acetylation.