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Entomopathogenic nematodes in Steinernema, together with their symbiont bacteria Xenorhabdus, are obligate and lethal parasites of insects that can provide effective biological control of some important lepidopteran, dipteran, and coleopteran pests of commercial crops. Phylogenetic relationships among 21 Steinernema species were estimated using 28S ribosomal DNA (rDNA) sequences and morphological characters. Sequences of the rDNA internal transcribed spacers were obtained to provide additional molecular characters to resolve relationships among Steinernema carpocapsae, Steinernema scapterisci, Steinernema siamkayai, and Steinernema monticolum. Four equally parsimonious trees resulted from combined analysis of 28S sequences and 22 morphological characters. Clades inferred from analyses of molecular sequences and combined datasets were primarily reliably supported as assessed by bootstrap resampling, whereas those inferred from morphological data alone were not. Although partially consistent with some traditional expectations and previous phylogenetic studies, the hypotheses inferred from molecular evidence, and those from combined analysis of morphological and molecular data, provide a new and comprehensive framework for evaluating character evolution of steinernematids. Interpretation of morphological character evolution on 6 trees inferred from sequence data and combined evidence suggests that many structural features of these nematodes are highly homoplastic, and that some structures previously used to hypothesize relationships represent ancestral character states.