The nematode Steinernema carpocapsae infects and kills many pest insects in agro-ecosystems and is commonly used in biocontrol of these pests. Growth of the nematodes prior to distribution for biocontrol commonly results in deterioration of traits that are essential for nematode persistence in field applications. To better understand the mechanisms underlying trait deterioration of the efficacy of natural parasitism in entomopathogenic nematodes, we explored the maintenance of fitness related traits including reproductive capacity, heat tolerance, virulence to insects and 'tail standing' (formerly called nictation) among laboratory-cultured lines derived from natural, randomly mating populations of S. carpocapsae. Laboratory cultured nematode lines with fitness-related trait values below wild-type levels regained wild-type levels of reproductive and heat tolerance traits when outcrossed with a non-deteriorated line, while virulence and 'tail standing' did not deteriorate in our experiments. Crossbreeding two trait-deteriorated lines with each other also resulted in restoration of trait means to wild-type levels in most crossbred lines. Our results implicate inbreeding depression as the primary cause of trait deterioration in the laboratory cultured S. carpocapsae. We further suggest the possibility of creating inbred lines purged of deleterious alleles as founders in commercial nematode growth.