Optimal medium composition, culture conditions, characteristics of phase variation and activity of insecticidal toxin by Xenorhabdus nematophilus isolated and identified from Korean entomopathogenic nematode Steinernema carpocapsae were examined. Optimal medium composition of this strain was 50-70 g/L yeast extract, 3 g/L $K_{2}HPO_{4}$, 1g/L $NH_{4}H_{2}PO_{4}$, 2g/L ${MgSO}_4$$cdot$${7H}_{2}O$, 10g/L NaCl and, these, yeast extract was found as a limiting nutrient for cell growth. When Monod equation was applied, maxmum specific growth rate and Monod constant were estimated as 0.13 $hr^{-1}$ and 20g/L, respectively. The pH of culture medium increased up to 8.5-9.5 regardless of initial pH 6-7 as the cells continued to grow. The specific growth rate in a 7 L fermentor was 0.18 $hr^{-1}$, which was enhancement 1.4 fold compared to a flask culture. In case of phase variation, phase I fraction was maintained above 90% at the stationary phase for both flask and fermentor cultures. According to oral toxicity test of Gallena mellonella by Xenorhabdus nematophilus, the addition of cell pellets into feed inhibited normal growth of insect larvae and killed completely then after 20 days cultivation. When culture supernatant of this strain was injected into hemolymph of insect larva, the toxicity was strongest at 24hr cultivation in the early exponential phase and gradually decreased as the culture time proceeded.