Oscheius carolinensis n. sp. (Rhabditidae) was recovered through the Galleria bait method from vermicompost produced in Raleigh, NC, USA. Morphological studies with light microscopy and scanning electron microscopy, as well as molecular analyses of the near-full-length small subunit rDNA gene (SSU), D2/D3 expansion segments of the large subunit rDNA gene (LSU) and internal transcribed spacer (ITS), revealed this as a new species, described herein as Oscheius carolinensis n. sp. The new species is characterised by a combination of characters including its unique DNA sequences, amphimictic reproduction, six separate lips with bristle-like sensilla, lateral field with four lines, leptoderan and open male bursa, arrangement of bursal papillae 1 + 1 + 1/3 + 3 + ph, evenly spaced first, second and third papillae, and separate spicules that are distally shaped like a crochet needle. Oscheius carolinensis n. sp. belongs to the Insectivorus-group and is closest to O. colombianus, O. chongmingensis n. comb., O. insectivorus and O. lucianii. A Bacillus-like bacterium appears to be associated with this nematode, based on our microscopic and SEM observations. Exposed Galleria larvae were killed within 5 days and numerous nematodes were recovered from the cadavers within 48 h. Preliminary tests revealed that this nematode is capable of infecting at least two other insect species (Pieris rapae and Tenebrio molitor) under laboratory conditions and therefore has potential as a biological control agent. The status of Heterorhabditidoides chongmingensis is discussed, the genus is proposed as a junior synonym of Oscheius, and O. chongmingensis n. comb. is proposed.