Parasitic nematodes are a global health concern and can infect a variety of organisms such as insects and mammals. As a result of infection, they can cause significant morbidity and mortality. Upon successful infection they can release excreted/ secreted proteins (ESPs) into the host, which enables them to evade or suppress host immunity and cause toxicity. Despite some characterization of ESPs in certain parasitic nematode species, very little is known about the mechanisms behind these interactions. Parasitic nematodes that infect insects called entomopathogenic nematodes (EPNs), have been employed to better understand molecular mechanism. Research with EPNs utilize insect model systems which enables circumvention of logistic and technical challenges encountered with using mammals. EPNs also have high homology with vertebrate parasitic nematodes which leads to the application of translational research. This work focuses on an ESP released by the EPN Steinernema carpocapsae, that displayed immunomodulatory effects in the model host Drosophila melanogaster. The ESP is a secreted phospholipase A2 (sPLA2) enzyme that I named Sc-sPLA2 and displayed immunosuppressive effects by reducing the number of hemocytes in the host, and likely by increasing circulation of an anti-inflammatory lipid. The sPLA2 operates enzymatically by cleaving fatty acids directly from the membrane which resulted in immunosuppressive effects on the humoral and cellular response. Analysis of fly hemolymph post injection of Sc-sPLA2 showed increase of eicosanoid and oxylipin precursors, and the increase of an anti-inflammatory fatty acid. In addition, the analysis of fly hemolymph post infection revealed several lipids that are depleted with the ability to rescue immunity upon treatment. This work also attempted to characterize endogenous lipid signaling mechanisms by identifying lipids, prostaglandins and endogenous sPLA2 enzymes that significantly improve the outcome of infection. Thus far this work has been able to establish that an eicosanoid precursor was able to stimulate the cellular response, furthering our understanding of how lipid signaling is immunomodulatory in D. melanogaster.