Genetics is a powerful means for improving crops and livestock. In recent years we and others have utilized a variety of genetic approaches aimed at enhancing beneficial traits in entomopathogenic nematodes (EPN). We review here some of the approaches we have taken for enhancing tolerance of Heterorhabditis bacteriophora to environmental extremes, in particular heat. Selection for heat tolerance proved to be effective, but was associated in deterioration of reproductive potential. On the other hand selection for resistance to nematicides was very effective, lasted when the selection pressure was removed, and did not compromise other parameters of biocontrol efficacy. Screening for natural isolates resulted in the identification of a heterorhabditid heat tolerant strain IS-5. Using genetic markers and cross hybridization we demonstrated that the trait was dominant and transferable to the commercial strain HP88 without concomitant reduction in biocontrol efficacy. Mutagenesis is useful for generating mutants displaying either desired beneficial traits or marker mutations. We demonstrate the utility of the latter. Finally, genetic engineering is a most promising tool for enhancing beneficial traits in EPN. The success in genetic transformation of EPN opens the way for generating transgenic nematodes carrying genes conferring resistance to various environmental extremes, most notably heat shock genes.