Oryza coarctata is the only wild rice species with significant salinity tolerance. The present work examines the role of the substantial rhizomatous tissues of O. coarctata in conferring salinity tolerance. Transition to an erect phenotype (shoot emergence) from prostrate growth of rhizome tissues is characterized by marked lignification and suberization of supporting sclerenchymatous tissue, epidermis, and bundle sheath cells in aerial shoot-proximal nodes and internodes in O. coarctata. With salinity, however, aerial shoot-proximal internodal tissues show reductions in lignification and suberization, most probably related to re-direction of carbon flux towards synthesis of the osmporotectant proline. Concurrent with hypolignification and reduced suberization, the aerial rhizomatous biomass of O. coarctata appears to have evolved mechanisms to store Na+ in these specific tissues under salinity. This was confirmed by histochemical staining, quantitative real-time reverse transcription–PCR expression patterns of genes involved in lignification/suberization, Na+ and K+ contents of internodal tissues, as well as non-invasive microelectrode ion flux measurements of NaCl-induced net Na+, K+, and H+ flux profiles of aerial nodes were determined. In O. coarctata, aerial proximal internodes appear to act as ‘traffic controllers’, sending required amounts of Na+ and K+ into developing leaves for osmotic adjustment and turgor-driven growth, while more deeply positioned internodes assume a Na+ buffering/storage role.