Nematophagous fungi present an eco-friendly solution to managing parasitic nematodes in ruminants, addressing critical challenges in livestock health and productivity. These fungi, which naturally prey on nematodes, offer an alternative to chemical anthelmintics, reducing the risks associated with resistance caused by their overuse. This chapter examines the potential of nematophagous fungi, focusing on their mechanisms of action, including trapping, parasitizing, and producing nematotoxic compounds. Key species such as Arthrobotrys oligospora, Duddingtonia flagrans, and Pochonia chlamydosporia have demonstrated significant efficacy in reducing nematode populations both in vitro and in vivo. Field trials incorporating fungal spores into animal feed show promising outcomes, with reduced nematode burdens and improved livestock health. Integrating these fungi into grazing systems supports sustainable livestock management practices, aligning with global efforts to minimize chemical inputs and enhance animal welfare. Beyond parasite control, nematophagous fungi exhibit immense biotechnological potential. Their enzymatic capabilities, particularly in degrading nematode cuticles, can be utilized to develop novel biopesticides, enhance soil health, and promote sustainable agriculture. Advances in fungal genomics and biotechnology open avenues for applications as biocontrol agents and biofertilizers, further broadening their scope in various industries. This chapter highlights the multifaceted benefits of nematophagous fungi, emphasizing their role in sustainable agriculture and biotechnology. Continued research and innovation are essential to fully harness their potential for addressing agricultural challenges and advancing biotechnological applications.