Drechmeria coniospora is an obligate fungal pathogen that infects nematodes via the adhesion of specialized spores to the host cuticle. D. coniospora is frequently found associated with Caenorhabditis elegans in environmental samples. It is used in the study of the nematode's response to fungal infection. Full understanding of this bi-partite interaction requires knowledge of the pathogen's genome, analysis of its gene expression program and a capacity for genetic engineering. The acquisition of all three is reported here. A phylogenetic analysis placed D. coniospora close to the truffle parasite Tolypocladium ophioglossoides, and Hirsutella minnesotensis, another nematophagous fungus. Ascomycete nematopathogenicity is polyphyletic; D. coniospora represents a branch that has not been molecularly characterized. A detailed in silico functional analysis, comparing D. coniospora to 11 fungal species, revealed genes and gene families potentially involved in virulence and showed it to be a highly specialized pathogen. A targeted comparison with nematophagous fungi highlighted D. coniospora-specific genes and a core set of genes associated with nematode parasitism. A comparative gene expression analysis of samples from fungal spores and mycelia, and infected C. elegans, gave a molecular view of the different stages of the D. coniospora lifecycle. Transformation of D. coniospora allowed targeted gene knock-out and the production of fungus that expresses fluorescent reporter genes. It also permitted the initial characterisation of a potential fungal counter-defensive strategy, involving interference with a host antimicrobial mechanism. This high-quality annotated genome for D. coniospora gives insights into the evolution and virulence of nematode-destroying fungi. Coupled with genetic transformation, it opens the way for molecular dissection of D. coniospora physiology, and will allow both sides of the interaction between D. coniospora and C. elegans, as well as the evolutionary arms race that exists between pathogen and host, to be studied.