Pathogenicity and symbiosis are central to bacteria-host interactions. Although several human pathogens have been subjected to functional genomic analysis, we still understand little about bacteria-invertebrate interactions despite their ecological prevalence. Advances in our knowledge of this area are often hindered by the difficulty of isolating and working with invertebrate pathogenic bacteria and their hosts. Here we review studies on pathogenicity and symbiosis in an insect pathogenic bacterium Photorhabdus and its entomopathogenic nematode vector and model insect hosts. Whilst switching between these hosts, Photorhabdus changes from a state of symbiosis with its nematode vector to one of pathogenicity towards its new insect host and both the bacteria and the nematode then cooperatively exploit the dying insect. We examine candidate genes involved in symbiosis and pathogenicity, their secretion and expression patterns in culture and in the host, and begin to dissect the extent of their genetic coregulation. We describe the presence of several large genomic islands, putatively involved in pathogenicity or symbiosis, within the otherwise Yersinia-like backbone of the Photorhabdus genome. Finally, we examine the emerging comparative genomics of the Photorhabdus group and begin to describe the interrelationship between anti-invertebrate virulence factors and those used against vertebrates.