Entomopathogenic nematodes (EPNs) in the genera Heterorhabditis and Steinernema are lethal parasites of insects that are of interest as models for understanding parasite-host interactions and as biocontrol agents for insect pests. EPNs harbor a bacterial endosymbiont in their gut that assists in insect killing. EPNs are capable of infecting and killing a wide range of insects, yet how the nematodes and their bacterial endosymbionts interact with the insect immune system is poorly understood. Here, we develop a versatile model system for understanding the insect immune response to parasitic nematode infection that consists of seven species of EPNs as model parasites and five species of Drosophila fruit flies as model hosts. We show that the EPN Steinernema carpocapsae, which is widely used for insect control, is capable of infecting and killing D. melanogaster larvae. S. carpocapsae is associated with the bacterium Xenorhabdus nematophila, and we show that X. nematophila induces expression of a subset of antimicrobial peptide genes and suppresses the melanization response to the nematode. We further show that EPNs vary in their virulence toward D. melanogaster and that Drosophila species vary in their susceptibilities to EPN infection. Differences in virulence among different EPN-host combinations result from differences in both rates of infection and rates of postinfection survival. Our results establish a powerful model system for understanding mechanisms of host-parasite interactions and the insect immune response to parasitic nematode infection.