A nematode-symbiotic bacterium, Xenorhabdus hominickii, exhibits two distinct lifestyles. Upon infection of its host nematode into a target insect, X. hominickii is released into the insect hemocoel and becomes pathogenic. This study examines the critical transformation in bacterial life forms concerning the activity of a transcriptional regulator, HexA. When X. hominickii was cultured in tryptic soy broth, HexA was expressed during the stationary phase of bacterial growth. Conversely, HexA was expressed in the early growth stage within the insect host, Spodoptera exigua, when infected with X. hominickii. The transient expression of HexA was succeeded by the expression of another transcriptional regulator, Lrp, which led to the production of bacterial virulent factors. Expression of HexA was manipulated by replacing its promoter with an inducible promoter controlled by the inducer, l-arabinose. In the absence of the inducer, the mutant bacteria expressed HexA at a low level, resulting in a bacterial culture broth that was more effective at suppressing insect immune responses than the wild type. When the inducer was added, HexA was expressed at high levels, rendering the culture broth ineffective in immunosuppression. Interestingly, expression of HexA inhibited the expression of another transcriptional regulator, Lrp, which in turn induced the expression of a non-ribosomal peptide synthetase, gxpS, leading to the production of an immunosuppressive metabolite, GXP. Suppression of HexA expression in mutant bacteria augmented GXP levels in secondary metabolites. This indicates that infection of X. hominickii into the insect host represses HexA expression and upregulates Lrp expression, leading to GXP production. The GXP metabolites inhibit insect immunity, thus protecting the bacteria-nematode complex. Therefore, the suppression of HexA expression in the insect hemocoel is crucial for the bacteria’s transition from a symbiotic to a pathogenic life form.