The growing nutritional demand of the world population poses great challenges to sustainable and productive agriculture. Entomopathogenic nematodes (EPNs) are an economically interesting alternative to traditional methods of pest control, despite poorly understood aspects of their biology and genomics. This study provides a comprehensive characterization of the genome of Heterorhabditis bacteriophora and its capacity to resist benzoxazinoids that are sequestered as defense compounds by an important insect pest. We performed a de novo chromosome-scale assembly of the H. bacteriophora genome and compared it with the genomes of other nematodes, highlighting syntenic orthologs and genome organization in EPNs. Co-phylogenetic analyses and genetic structure data of several H. bacteriophora isolates and their Photorhabdus symbionts suggest divergent evolutionary scenarios of these two species groups. Population genomics analyses within H. bacteriophora identified genetic variation distinguishing between strains susceptible and resistant to benzoxazinoids. Genome-wide differentiation (FST) pointed to genomic regions related to deoxyribonucleotide biosynthetic processes, polypeptide N-acetylgalactosaminyltransferase activity and single-stranded DNA endodeoxyribonuclease activity that were shaped by strong selective pressures. Having identified candidate genes associated with insect pathogenicity and benzoxazinoid resistance, our findings provide a foundation for future work on the efficacy and infectivity of EPNs in pest management.