Parasitic nematodes, living in the intestinal tract or within tissues of theirs hosts, are constantly exposed to an array of immune effector mechanisms. One strategy to cope with the immune response is the release of immunomodulatory components that block effector mechanisms or interact with the cytokine network. Among the secreted nematode immunomodulators, cysteine protease inhibitors (cystatins) are shown to be of major importance. Nematode cystatins inhibit, among others, proteases involved in antigen processing and presentation, which leads to a reduction of T cell responses. At the same time nematode cystatins modulate cytokine responses, the most prominent trait being the upregulation of IL-10, a Th2 cytokine, by macrophages. In this situation, IL-10 leads among others to downregulation of costimulatory surface molecules of macrophages. These properties contribute to induction of an anti-inflammatory environment, concomitant with a strong inhibition of cellular proliferation. This setting is believed to favour the survival of worms. An opposite activity of nematode cystatins is the upregulation of production of inducible nitric oxide by IFN-gamma activated macrophages, an intrinsic property of natural cysteine protease inhibitors. This shows that these proteins can act as proinflammatory molecules under certain circumstances. A comparison of the immunomodulatory effects of cystatins of filarial nematodes with homologous proteins of the free-living nematode Caenorhabditis elegans revealed distinct differences. Caenorhabditis elegans cystatins induce the production of the Th1 cytokine IL-12, in contrast to filarial cystatins that upregulate IL-10. Caenorhabditis elegans cystatins hardly inhibit cellular proliferation. These data suggest that cystatins of parasitic nematodes have multiple, specific capacities for immunomodulation, acting in parallel on different immune effector mechanisms. Elucidation of the mechanisms involved might be useful in the development of immunotherapeutic reagents in the future.