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The transcriptional response in the parasitic fungus Monacrosporium haptotylum and its nematode host Caenorhabditis elegans were analysed during infection using cDNA microarrays. The array contained 2684 fungal and 372 worm gene reporters. Dramatic shifts occurred in the transcriptome of M. haptotylum during the different stages of the infection. An initial transcriptional response was recorded after 1 h of infection when the traps adhered to the cuticle, but before immobilization of the captured nematodes. Among the differentially expressed genes were two serine protease genes (spr1 and spr2), and several homologues to genes known to be regulated in other pathogenic fungi. After 4 h, when approximately 40% of the nematodes were paralysed, we identified an upregulated cluster of 372 fungal genes which were not regulated during the other phases of the infection. This cohort contained a large proportion (79%) of genes that appear to be specific for M. haptotylum and closely related species. These genes were of two different classes: those translating into presumably functional peptides and those with no apparent protein coding potential (non-coding RNAs). Among the infection-induced C. elegans genes were those encoding antimicrobial peptides, protease inhibitors and lectins.