Over one-year period, 150 pasture soil samples and 138 sheep faecal samples, collected from different parts of Iran were screened for the presence of nematophagous fungi. The samples were cultured at 25ºC on chloramphenicol-2% water agar (CHF-WA) plates in the presence of Haemonchus contortus third stage larvae (L3) and checked over a two-month period for characteristic conidia, conidiophores and hyphal traps of nematophagous fungi. Suspected nematophagous fungi were isolated by periodic transfer of the fungi on CHF-WA plates using the agar block method. Overall, 11 soil samples were found to harbour the nematode-trapping fungus Arthrobotrys from which 3 pure isolates were made and consequently identified as Arthrobotrys oligospora IRAN 877 C, IRAN 878 C and IRAN 879 C. Nematophagous fungi were not found in any tested sheep faecal samples. The predatory capacity of the isolates was tested against H. contortus infective larvae and then compared to reference strains A. oligospora CBS 111.37, A. oligospora CBS 251.82 and Duddingtonia flagrans CBS 583.91. The local strains of A. oligospora reduced the development of H. contortus L3 by 75-85%, whereas, the predatory capacity of reference A. oligospora and D. flagrans strains was measured in the range of 51- 85% compared to the fungus free controls. Study of the effect of temperature on predatory activity of A. oligospora strains IRAN 877 C and CBS 111.37 revealed a reduction of more than 95% in infective larvae of H. contortus at temperature levels between 15 to 25ºC. This reduction was significantly decreased to 30% and 50% at 10ºC and 30ºC, respectively. The nematode-trapping fungus A. oligospora is reported from soil of Iran for the first time and its potential role in biocontrol of gastrointestinal nematodes of ruminants is discussed.