Deladenus (= Beddingia) siricidicola (Tylenchida: Neotylenchidae) is the most effective biocontrol agent used against the invasive wood wasp, Sirex noctilio (Fabricius) (Hymenoptera: Siricidae). The nematodes feed and reproduce on the wood-inhabiting fungus, Amylostereum areolatum (Chaillet ex Fr.) Boidin (Russulales: Amylostereaceae) and parasitise larvae of S. noctilio. In the nematode biocontrol program, the nematodes are inoculated into herbicide-weakened ‘trap trees’. Recent declines in nematode parasitism of S. noctilio in Australia have coincided with an increased incidence of an exotic bark beetle, Ips grandicollis (Eichhoff) (Coleoptera: Curculionidae), attacking trap trees and vectoring a wood-inhabiting fungus, Ophiostoma ips (Rumbold) Nannfelt (Ophiostomatales: Ophiostomataceae), which may inhibit migration of the nematode within the tree to the detriment of S. noctilio biocontrol. Several in vitro and in vivo experiments were conducted to investigate the effect of fungal interactions on the ability of D. siricidicola to locate and reproduce on A. areolatum. Deladenus siricidicola showed preference to A. areolatum in the presence and absence of O. ips, but the presence of O. ips negatively affected the choice response and the number of eggs laid by the nematodes. Deladenus siricidicola was unable to survive and reproduce on O. ips. Results give a clearer understanding of the choice response of D. siricidicola in I. grandicollis infested trees, explaining the disruptive impact of bark beetles on biocontrol of S. noctilio, an effect that could extend from Australia to other important pine growing countries.