Identifying parasitism genes encoding proteins secreted from nematodes is the key to understanding the molecular basis of nematode parasitism to insects. In this paper, a cDNA with two introns and three exons encoding a cysteine protease inhibitor was identified by screening a cDNA subtractive library constructed from the nematode, Steinernema carpocapsae, induced by Galleria mellonella hemolymph. The full-length cDNA contains an open reading frame encoding a 139-amino acid protein, designated Sc-cys, with a 19-residue signal peptide. The mature protein was predicted to have a molecular weight of 12,531.59 Da, a pI of 9.44, one disulfide bond, and three conserved domains believed to be important for the inhibition of cysteine proteases. In Basic Local Alignment and Search Tool analyses, the putative protein precursor displayed 26-42% identities to a multitude of cystatins or cystatin-like proteins. Phylogenetic analysis suggested the novel cystatin is likely a new member of the family 2 cystatins. Reverse northern blot, semi-quantitative reverse transcriptase polymerase chain reaction (RT-PCR), and real-time RT-PCR analyses showed that the expression level of Sc-cys was upregulated substantially after induction by insect hemolymph. The specific analysis of genes encoding secretory proteins is providing a profile of putative parasitism genes expressed in S. carpocapsae throughout the parasitic cycle.