We show that for a locally free C ∞ -action of a connected and simply connected nilpotent Lie group on a compact manifold, if every real valued cocycle is cohomologous to a constant cocycle, then the action is parameter rigid. The converse is true if the action has a dense orbit. Using this, we construct parameter rigid actions of simply connected nilpotent Lie groups whose Lie algebras admit rational structures with graduations. This generalizes the results of dos Santos [8] concerning the Heisenberg groups.