Entomopathogenic nematodes in the families Steinernematidae and Heterorhabditidae are commercially available as biological insecticides against soil-inhabiting insects. Progress achieved in liquid fermentation, formulation stability, and application strategy has allowed nematode-based products to become competitive with chemical insecticides in high- and medium-value crops on the basis of cost/benefit ratio and ease of application. Attributes making the nematodes ideal biological insecticides include their broad host range, high virulence, safety for nontarget organisms, and high efficacy in favorable habitats. Further advancements in formulation stability, application technology, product fate in the environment, and cost reductions are needed to expand the market potential of nematode-based products, especially in large-volume, low-value markets such as cotton and corn.