Abstract: The activity of 36 isolates from Yunnan Province assigned to Paecilomyces was tested against nematode ( Panagrellus redivivus) . Results showed that some of them could destroy nematode. Besides Paecilomyces lilacinus , a known species with nematicidal activitly by producing toxin and extracellular enzyme , an isolate of P. cateniannulatus (no. 11) degraded nematode obviously , and an unidentified isolate (A-43-1) with higher nematicidal activity by secreting a red pigment , stained nematodes to red.