The present invention is directed to a method for producing a new nematocidal composition particularly useful against plant parasitic nematodes and also a process to prevent damage resulting from nematode infestation. The method for production of the composition involves heating a pH-adjusted fermentation broth of microorganisms to a temperature of at least about 100° C. for at least about 15 minutes. Preferably, the microorganism is Gibberella fujikuroi, Streptomyces erythraeus, Bacillus sphaericus, Bacillus thuringiensis or Fusarium moniliforme.