Drechmeria coniospora (DC) is a highly specialized fungal pathogen that attacks plant-pathogenic nematodes and lives out most of its life cycle as a parasite of nematodes.  It is critical to deepen our understanding of the basic biology of this fungus to provide a knowledge base for developing it as an environmentally friendly biological control agent against economically injurious nematodes.  To further this end the DC genome was sequenced and the likely functions of its genes have been identified. Analysis of the genome and comparisons with other fungal pathogens reveal that although the DC has reduced the number of genes related to the ability to subsist on soil detritus (i.e. dead plant and animal material) it shares most of the genes that are responsible for successfully parasitizing its host, most notably genes coding for proteins required for attachment to and penetration of the host.  Also identified were genes responsible for the biosynthesis of a potent antifungal, antibacterial, and nematicidal toxin involved in the interaction with the nematode host.  The chemical structure of these toxins was partially elucidated so they may be studied as possible lead chemistries for target-specific control of injurious plant pests and diseases.