Xenorhabdus nematophila is an emerging model for both mutualism and pathogenicity in different invertebrate hosts. Here we conduct a mutant study of the EnvZ-OmpR two-component system and the flagella sigma factor, FliA (σ28). Both ompR and envZ strains displayed precocious swarming behaviour, elevated flhD and fliA mRNA levels and early production of lipase, protease, haemolysin and antibiotic activity. Inactivation of fliA eliminated exoenzyme production which was restored by complementation with the fliAZ operon. Inactivation of flhA, a gene encoding a component of the flagella export apparatus, eliminated lipase but not protease or haemolysin production indicating these enzymes are secreted by different export pathways. FliA-regulated lipase (xlpA) and protease (xrtA) genes were identified. Their expression and level of production were elevated in the ompR and envZ strains and markedly reduced in the fliA strain while both were expressed normally in the flhA strain. We also found that expression of nrps1 which encodes a non-ribosomal peptide synthetase was elevated in the ompR and envZ strains. The fliA strain was pathogenic towards the insect host indicating that motility and FliA-regulated exoenzyme production were not essential for virulence. These findings support a model in which the EnvZ-OmpR-FlhDC-FliA regulatory network co-ordinately controls flagella synthesis, and exoenzyme and antibiotic production in X. nematophila.