The fungus Pochonia chlamydosporia is a biocontrol agent with commercial potential for root knot and cyst nematodes. It produces an alkaline serine protease, VCP1, during infection of nematode eggs. The gene encoding VCP1 was sequenced and the sequences of cDNAs from six isolates from different nematode hosts were compared. The gene encoding VCP1 was similar to PR1 from Metarhizium anisopliae with similar regulatory elements. Comparison of translated cDNA sequences revealed two amino acid polymorphisms at positions 65 and 99, indicating a difference between isolates from cyst and root nematodes. The positions and nature of the polymorphisms indicated that the two forms of VCP1 might have different properties and this was tested with five chromogenic polypeptide substrates. Enzyme assays revealed the two forms differed in their abilities to utilise Succ-Ala-Ala-Pro-Phe-pNa and Succ-Ala-Val-Pro-Phe-pNa, suggesting different amino acid affinities at the S3 binding region. This indicates host related genetic variation in VCP1 between isolates of P. chlamydosporia isolated from different nematode hosts, which might contribute to host preference. Such differences may be important in future exploitation of P. chlamydosporia as a nematode biocontrol agent.