Nematode-insect interactions are ubiquitous, complex, and constantly changing as the host and nematode coevolve. The entomophilic nematode Pristionchus pacificus is found on a myriad of beetle species worldwide, though the molecular dynamics of this relationship are largely unknown. To better understand how host cues affect P. pacificus embryogenesis, we characterized the threshold of sensitivity to the pheromone (Z)-7-tetradecen-2-one (ZTDO) by determining the minimum exposure duration and developmental window that results in P. pacificus embryonic lethality. We found early-stage embryos exposed to volatile ZTDO for as few as four hours all display terminal embryogenesis, characterized by punctuated development up to 48 hours later, with abnormal morphology and limited lumen formation. To determine if the pheromone arrests pre-hatching development by suffocating or permeabilizing the eggshells, we raised embryos under anoxic condition as well as examined eggshell permeability using the lipophilic dye FM4-64. We found that asphyxiating the embryos arrested embryogenesis in a reversible manner but did not phenocopy the effects of ZTDO exposure, whereas the ZTDO-induced disruption of embryogenesis did correlate with increased eggshell permeability. The effects of ZTDO are also highly specific, as other lipid insect compounds do not produce any detectable embryocidal effect. The high specificity and unusual teratogenic effect of ZTDO may be important in mediating the host-nematode relationship by regulating P. pacificus development.