We report the cloning and functional characterization of an endo-beta-1,3-glucanase from the pinewood nematode Bursaphelenchus xylophilus acquired by horizontal gene transfer from bacteria. This is the first gene of this type from any nematode species. We show that a similar cDNA is also present in another closely related species B. mucronatus, but that similar sequences are not present in any other nematode studied to date. The B. xylophilus gene is expressed solely in the oesophageal gland cells of the nematode and the protein is present in the nematode's secretions. The deduced amino acid sequence of the gene is very similar to glycosyl hydrolase family 16 proteins. The recombinant protein, expressed in Escherichia coli, preferentially hydrolysed the beta-1,3-glucan laminarin, and had very low levels of activity on beta-1,3-1,4-glucan, lichenan and barley beta-glucan. Laminarin was degraded in an endoglucanase mode by the enzyme. The optimal temperature and pH for activity of the recombinant enzyme were 65 degrees C and pH 4.9. The protein is probably important in allowing the nematodes to feed on fungi. Sequence comparisons suggest that the gene encoding the endo-beta-1,3-glucanase was acquired by horizontal gene transfer from bacteria. B. xylophilus therefore contains genes that have been acquired by this process from both bacteria and fungi. These findings support the idea that multiple independent horizontal gene transfer events have helped in shaping the evolution of several different life strategies in nematodes.