Entomopathogenic nematodes are effective biocontrol agents against arthropod pests. However, their efficacy is limited due to sensitivity to environmental extremes. The objective of the present study was to establish a foundation of genetic-based selection tools for beneficial traits of heat and desiccation tolerance in entomopathogenic nematodes. Screening of natural populations enabled us to create a diverse genetic and phenotypic pool. Gene expression patterns and genomic variation were studied in natural isolates. Heterorhabditis isolates were phenotyped by heat- and desiccation-stress bioassays to determine their survival rates compared to a commercial line. Transcriptomic study was carried out for the commercial line, a high heat-tolerant strain, and for the natural, low heat-tolerant isolate. The results revealed a higher number of upregulated vs. downregulated transcripts in both isolates vs. their respective controls. Functional annotation of the differentially expressed transcripts revealed several known stress-related genes and pathways uniquely expressed. Genome sequencing of isolates with varied degrees of stress tolerance indicated variation among the isolates regardless of their phenotypic characterization. The obtained data lays the groundwork for future studies aimed at identifying genes and molecular markers as genetic selection tools for enhancement of entomopathogenic nematodes ability to withstand environmental stress conditions.