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Background    Xenorhabdus innexi  is a bacterial symbiont of  Steinernema scapterisci  nematodes, which is a cricket-specialist parasite and together the nematode and bacteria infect and kill crickets. Curiously,  X. innexi  expresses a potent extracellular mosquitocidal toxin activity in culture supernatants. We sequenced a draft genome of  X. innexi  and compared it to the genomes of related pathogens to elucidate the nature of specialization.    Results  Using green fluorescent protein-expressing  X. innexi  we confirm previous reports using culture-dependent techniques that  X. innexi  colonizes its nematode host at low levels (~3–8 cells per nematode), relative to other  Xenorhabdus-Steinernema  associations. We found that compared to the well-characterized entomopathogenic nematode symbiont  X. nematophila ,  X. innexi  fails to suppress the insect phenoloxidase immune pathway and is attenuated for virulence and reproduction in the Lepidoptera  Galleria mellonella  and  Manduca sexta , as well as the dipteran  Drosophila melanogaster . To assess if, compared to other  Xenorhabdus  spp.,  X. innexi  has a reduced capacity to synthesize virulence determinants, we obtained and analyzed a draft genome sequence. We found no evidence for several hallmarks of  Xenorhabdus  spp. toxicity, including Tc and Mcf toxins. Similar to other  Xenorhabdus  genomes, we found numerous loci predicted to encode non-ribosomal peptide/polyketide synthetases. Anti-SMASH predictions of these loci revealed one, related to the  fcl  locus that encodes fabclavines and  zmn  locus that encodes zeamines, as a likely candidate to encode the  X. innexi  mosquitocidal toxin biosynthetic machinery, which we designated Xlt. In support of this hypothesis, two mutants each with an insertion in an Xlt biosynthesis gene cluster lacked the mosquitocidal compound based on HPLC/MS analysis and neither produced toxin to the levels of the wild type parent.    Conclusions  The  X. innexi  genome will be a valuable resource in identifying loci encoding new metabolites of interest, but also in future comparative studies of nematode-bacterial symbiosis and niche partitioning among bacterial pathogens.    Electronic supplementary material  The online version of this article (doi: 10.1186/s12864-017-4311-4) contains supplementary material, which is available to authorized users.

The insect pathogenic bacterium Xenorhabdus innexi has attenuated virulence in multiple insect model hosts yet encodes a potent mosquitocidal toxin