The potential of 24 indigenous isolates of Purpureocillium lilacinum (Paecilomyces lilacinus) (Thom) Samson collected from different agro-climatic zones of India was investigated against the root-knot nematode, Meloidogyne incognita. The studies were conducted in vitro (larvicidal, ovicidal and egg-parasitising capacity) and under naturally infested field conditions with selected strains. Repeated field trials were conducted with talc-based preparations of fungal strains at 10 kg ha−1, which were applied mixed in farm yard manure (FYM) at 1.5 t ha−1. Results (in vitro) showed that all tested isolates were capable to parasitise eggs, inhibit egg hatching and cause juvenile mortality of M. incognita at various levels. Based on the performance under in vitro studies, eight isolates (NDPL-01, ANDPL-02, SHGPL-03, HYBPL-04, AHDPL-05, PTNPL-06, SNGPL-07 and VNSPL-08) were re-tested to confirm the results. HYBDPL-04 was found causing highest mortality (80%), inhibition of egg hatching (90%) as well as parasitisation of M. incognita eggs (75%). Under field trials also, the best protection of root-knot disease of tomato (Lycopersicon esculentum L.), in terms of reduction of galls (61%) and reproductive factor (Pf/Pi (RF) = 0.2) was achieved through application of HYBDPL-04 + FYM compared to control and other tested isolates. It also enhanced marketable yield of tomato up to 43%. It is concluded that the HYBDPL-04 strain of P. lilacinum is highly effective for management of root-knot disease of tomato under naturally infested field conditions. It is the isolate which produced the maximum number of metabolites which were extracted through high pressure liquid chromatography.