Entomopathogenic nematodes survive in the soil as stress-resistant infective juveniles that seek out and infect insect hosts. Upon sensing internal host cues, the infective juveniles regurgitate bacterial pathogens from their gut that ultimately kill the host. Inside the host, the nematode develops into a reproductive adult and multiplies until unknown cues trigger the accumulation of infective juveniles. Here, we show that the entomopathogenic nematode Heterorhabditis bacteriophora uses a small-molecule pheromone to control infective juvenile development. The pheromone is structurally related to the dauer pheromone ascarosides that the free-living nematode Caenorhabditis elegans uses to control its development. However, none of the C. elegans ascarosides are effective in H. bacteriophora, suggesting that there is a high degree of species specificity. Our report is the first to show that ascarosides are important regulators of development in a parasitic nematode species. An understanding of chemical signaling in parasitic nematodes may enable the development of chemical tools to control these species.