A phase variation has been reported in an entomopathogenic bacterium, Xenorhabdus nematophila. Compared with a wild-type primary form, a secondary form usually loses several physiological and biochemical characters. This study showed that the phase variation of X. nematophila caused a significant alteration in its immunosuppressive activity and subsequent entomopathogenicity. A secondary form of X. nematophila was detected in laboratory colonies and exhibited significant differences in dye absorption and entomopathogenicity. In addition, the secondary form was different in its production of eicosanoid-biosynthesis inhibitors (EBIs) compared with the primary form of X. nematophila. Production of oxindole and p-hydroxypropionic acid was significantly reduced in the culture broth of the secondary form of X. nematophila. The reduced EBI production resulted in significant suppression in the inhibitory effects on cellular nodule formation and phenoloxidase activity. Culture broth of the primary form of X. nematophila enhanced the pathogenicity of Bacillus thuringiensis ( Bt) significantly more than the culture broth of the secondary form. Furthermore, this study developed a highly efficient "Dual Bt-Plus: to control both lepidopteran insect pests Plutella xylostella and Spodoptera exigua, by mixing two effective Bt strains along with the addition of potent bacterial metabolites or 100-fold concentrated X. nematophila culture broth.