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Rice false smut caused by the biotrophic fungal pathogen <i>Ustilaginoidea virens</i> has become one of the most important diseases in rice. The large effector repertory in <i>U. virens</i> plays a crucial role in virulence. However, current knowledge of molecular mechanisms how <i>U. virens</i> effectors target rice immune signaling to promote infection is very limited. In this study, we identified and characterized an essential virulence effector, SCRE4 (Secreted Cysteine-Rich Effector 4), in <i>U. virens</i>. SCRE4 was confirmed as a secreted nuclear effector through yeast secretion, translocation assays and protein subcellular localization, as well as up-regulation during infection. The <i>SCRE4</i> gene deletion attenuated the virulence of <i>U. virens</i> to rice. Consistently, ectopic expression of SCRE4 in rice inhibited chitin-triggered immunity and enhanced susceptibility to false smut, substantiating that SCRE4 is an essential virulence factor. Furthermore, SCRE4 transcriptionally suppressed the expression of <i>OsARF17</i>, an auxin response factor in rice, which positively regulates rice immune responses and resistance against <i>U. virens.</i> Additionally, the immunosuppressive capacity of SCRE4 depended on its nuclear localization. Therefore, we uncovered a virulence strategy in <i>U. virens</i> that transcriptionally suppresses the expression of the immune positive modulator OsARF17 through nucleus-localized effector SCRE4 to facilitate infection.