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Background: Pine wilt disease, caused by the pinewood nematode Bursaphelenchus xylophilus (PWN), is an important destructive disease of pine forests worldwide. In addition to behaving as a plant-parasitic nematode that feeds on epithelial cells of pines, this pest relies on fungal associates for completing its life cycle inside pine trees. Manipulating microbial symbionts to block pest transmission has exhibited an exciting prospect in recent years; however, transforming the fungal mutualists to toxin delivery agents for suppressing PWN growth has received little attention. Results: In the present study, a nematicidal gene cry5Ba3 , originally from a soil Bacillus thuringiensis (Bt) strain, was codon-preferred as cry5Ba3Φ and integrated into the genome of a fungus eaten by PWN, Botrytis cinerea , using Agrobacterium tumefaciens -mediated transformation. Supplementing wild-type B. cinerea extract with that from the cry5Ba3Φ transformant significantly suppressed PWN growth; moreover, the nematodes lost fitness significantly when feeding on the mycelia of the cry5Ba3Φ transformant. N-terminal deletion of Cry5Ba3Φ protein weakened the nematicidal activity more dramatically than did the C-terminal deletion, indicating that domain I (endotoxin-N) plays a more important role in its nematicidal function than domain III (endotoxin-C), which is similar to certain insecticidal Cry proteins. Conclusions: Transformation of Bt nematicidal cry genes in fungi can alter the fungivorous performance of B. xylophilus and reduce nematode fitness. This finding provides a new prospect of developing strategies for breaking the life cycle of this pest in pines and controlling pine wilt disease. [ABSTRACT FROM AUTHOR]