Aims: To evaluate the relationship between leucinostatin production by Paecilomyces lilacinus isolates and their biological activities. Methods and Results: The nematicidal, parasitic and enzymatic activity of Australian P. lilacinus isolates were investigated. Nematicidal activities of culture filtrates were measured by mortality and inhibition of reproduction of Caenorhabditis elegans, whereas egg-parasitic activity was measured by colonization on Meloidogyne javanica. Enzymatic activities (protease and chitinase) were assayed on solid media. The results suggest that leucinostatins in P. lilacinus are indicators of nematicidal activity, whereas chitinase activity might be related to parasitism. Conclusions: Nematicidal activity of culture filtrates of Paecilomyces lilacinus strains related to their ability to produce leucinostatins. Significance and Impact of the Study: This is the first study describing the leucinostatins as nematicides.