The entomopathogenic nematode Steinernema carpocapsae has been widely used for the biological control of insect pests. It shares a symbiotic relationship with the bacterium Xenorhabdus nematophila, and is emerging as a genetic model to study symbiosis and pathogenesis. We obtained a high-quality draft of the nematode's genome comprising 84,613,633 bp in 347 scaffolds, with an N50 of 1.24 Mb. To improve annotation, we sequenced both short and long RNA and conducted shotgun proteomic analyses. S. carpocapsae shares orthologous genes with other parasitic nematodes that are absent in the free-living nematode C. elegans, it has ncRNA families that are enriched in parasites, and expresses proteins putatively associated with parasitism and pathogenesis, suggesting an active role for the nematode during the pathogenic process. Host and parasites might engage in a co-evolutionary arms-race dynamic with genes participating in their interaction showing signatures of positive selection. Our analyses indicate that the consequence of this arms race is better characterized by positive selection altering specific functions instead of just increasing the number of positively selected genes, adding a new perspective to these co-evolutionary theories. We identified a protein, ATAD-3, that suggests a relevant role for mitochondrial function in the evolution and mechanisms of nematode parasitism.