Nematodes are globally distributed invertebrates, which are often found living in soil or as parasites of animals, insects and plants. They lack vision and hearing systems, so the survival of both free-living and parasitic nematodes depends on well developed chemosensation and chemotaxis systems. Nematodes utilize chemical signals in their environment to detect food sources, potential hosts, noxious compounds, reproductive partners and sometimes to enable them to choose between alternative developmental states. Interest in the mechanisms involved in chemosensing and identification of the discrete components of the chemical signals has steadily increased over the past few decades. Here we have summarized and evaluated recent discoveries and advances in this field, involving the mechanism of developmental regulation, the recognition of hosts, the construction and function of the chemoreceptor system, signal transduction, the prospects for related research and the control of harmful nematodes based on chemical ecology. The pheromonal cues that indicate overcrowding, high temperature, or starvation can trigger the nematodes to enter into diapause and enhance longevity by modulating endocrine signaling and gene expression. The genetic and molecular basis of phenotypic plasticity has been studied extensively in Caenorhabditis elegans, and recently, it was discovered that pheromones called ascarosides secreted by C. elegans themselves induce formation of the dauer stage and the four chemoreceptors of the dauer juveniles. Recognition of hosts by nematodes is very specific and the chemical signals from the hosts, as well as the chemoreceptors of the nematodes play key roles in this process. Both free-living and parasitic nematodes can sense chemical signals comprised of water soluble and/or volatile compounds. The chemotaxis of C. elegans has been studied for over 30 years and inducing substances identified thus far include salt ion (Na⁺、Li⁺、Cl^-、OH^-), amino acid, nucleotides, biotin and some volatiles (pyrazine, diacetyl, benzaldehyde, 2,4,5-trimethylthiazole, isoamylalcohol, 2,3-pentanedione). Another example is Bursaphelenchus xylophilus, the pinewood nematode, which is a plant parasitic nematode that is transmitted via Monochamus beetles. The chemical relationships within this system has been under investigation for several years, but no conclusive results regarding the discrete signaling molecules involved and their roles within the system have been obtained to date. Electrophysiological analyses indicated that different responses to chemical signals are due to differences in the chemoreceptors of various species of nematodes, which are composed by amphid and phasmid. Specific chemoreceptors in the neurons recognize particular compounds, and the neurons work collectively to receive chemical signals, and then activate a response through signal transduction. Nematodes, especially plant parasitic nematodes, cause huge economic damages every year, as advances in the study of the chemosenation mechanism are made, more effective strategies based on chemical ecology may be devised, thus replacing traditional control methods utilized today.