Teladorsagia circumcincta is one of the most economically important gastrointestinal nematode parasites of sheep in cool temperate regions, to which sheep show genetically-varying resistance to infection. This is a very common parasite and viable sheep production requires the extensive use of anthelmintic drugs. However, the emergence of drug-resistant parasites has stimulated the search for alternative control strategies to curb production losses. Lambs become infected soon after weaning and begin to control parasite burden within 8-10 weeks of continual infection. This control is an acquired characteristic mediated by the development of parasite-specific antibodies. This paper describes the immunology associated with resistance and susceptibility, focussing on differential T cell activation that regulates the production of specific effector mechanisms. It continues by summarizing the methods used to identify genes that could be exploited as molecular markers of selection for resistance. In particular it focusses on the link between understanding the molecular immunology of infection and the identification of candidate genes for selection.