Marine nematode worms without a mouth or functional gut are found worldwide in intertidal sandflats, deep-sea muds and methane-rich pock marks, and morphological studies show that they are associated with endosymbiotic bacteria. While it has been hypothesized that the symbionts are chemoautotrophic sulfur oxidizers, to date nothing is known about the phylogeny or function of endosymbionts from marine nematodes. In this study, we characterized the association between bacterial endosymbionts and the marine nematode Astomonema sp. from coral reef sediments in the Bahamas. Phylogenetic analysis of the host based on its 18S rRNA gene showed that Astomonema sp. is most closely related to non-symbiotic nematodes of the families Linhomoeidae and Axonolaimidae and is not closely related to marine stilbonematinid nematodes with ectosymbiotic sulfur-oxidizing bacteria. In contrast, phylogenetic analyses of the symbionts of Astomonema sp. using comparative 16S rRNA gene sequence analysis revealed that these are closely related to the stilbonematinid ectosymbionts (95–96% sequence similarity) as well as to the sulfur-oxidizing endosymbionts from gutless marine oligochaetes. The closest free-living relatives of these gammaproteobacterial symbionts are sulfur-oxidizing bacteria from the family Chromatiaceae. Transmission electron microscopy and fluorescence in situ hybridization showed that the bacterial symbionts completely fill the gut lumen of Astomonema sp., suggesting that these are their main source of nutrition. The close phylogenetic relationship of the Astomonema sp. symbionts to known sulfur-oxidizing bacteria as well as the presence of the aprA gene, typically found in sulfur-oxidizing bacteria, indicates that the Astomonema sp. symbionts use reduced sulfur compounds as an energy source to provide their hosts with nutrition.