The effects of Margosan-O, a commercial neem-based insecticide, on the entomopathogenic nematode species Steinernema carpocapsae (Steiner), S. feltiae (Filipjev), and S. glaseri (Steiner) were examined in this study. Both acute and chronic toxicity were estimated, as were effects on nematode infectivity after incubation with the insecticide. Margosan-O was toxic to all 3 species, but only at much higher concentrations shall the recommended field rate of 20 mg azadirachtin/liter water. The acute LC50 and 95% FL for S. carpocapsae exposed to Margosan-O was 425 (341-501) mg azadirachtin per liter. Chronic toxicity was not significantly different from acute toxicity until the 15th d of incubation. The acute LC50 and 95% FL for S. feltiae was 380 (340-443) mg azadirachtin per liter. Chronic toxicity values were not significantly different until day 15. The susceptibility of S. feltiae increased greatly between 12 and 15 d of incubation with Margosan-O. The acute LC50 and 95% FL for S. glaseri was 351(330-370) mg azadirachtin per liter. Unlike the other 2 species, I detected no difference in susceptibility, among incubation times for S. glaseri. When the 3 species were compared, susceptibility to Margosan-O at LC50 at each incubation time interval was not significantly different until day 15. S. feltiae was significantly more susceptible than the other species after exposure to Margosan-O for 15 d. Infectivity [measured as the ability to kill greater waxmoth larvae, Galleria mellonella (L.), contained in well plates], was reduced in all 3 species only when they had been incubated with Margosan-O at concentrations > 200 mg azadirachtin per liter. When Margosan-O and nematodes were applied together at field rates to soil, infectivity was not reduced.