Arrested development is an important feature in the life cycle of nematodes, allowing survival for prolonged periods in adverse environments. Within parasitic and non-parasitic nematodes, an arrested third stage larvae (L3) is common in the life cycle, and may be facultative or obligate. In the free-living, model nematode Caenorhabditis elegans, a dormant first larval stage (L1) also develops in response to starvation. This L1 arrest has also been demonstrated in hookworms and the entomopathogenic nematode Heterorhabditis bacteriophora. While maintenance of an L1 arrest stage over evolutionary time in hookworm is necessary due to the harsh environments encountered by the free-living L1, dormant L1 are presumptively non-adaptive to H. bacteriophora. In contrast to C. elegans and hookworms, H. bacteriophora spends all but a single life cycle stage (the L3) within the highly nutritive environment of an insect host. Therefore, despite an apparent lack of need, L1 arrest remains conserved in H. bacteriophora, suggesting a potential function beyond ensuring survival under adverse conditions. To investigate this phenomenon, we characterized the effect of starvation and L1 arrest on fecundity of subsequent generations. H. bacteriophora embryos harvested from hermaphroditic adults were plated in the presence or 24-hour absence of their bacterial food source, Photorhabdus luminescens. Following re-feeding, the starved/re-fed and never starved L1 populations were observed, as were their offspring (F1) and the subsequent generation (F2), for any changes in fecundity, development, and fitness. The starved population demonstrated a 67% reduction in egg-laying, as well as a reduction in total F1 offspring produced compared to the control. Both trends continued in the subsequent F2 generation. While a reduction in F1 egg-laying was observed, the hatch rate for starved/re-fed nematodes was higher (44%). This suggests that starvation exerts long term, multigenerational effects on reproduction in H. bacteriophora. We also asked whether an extended period of starvation-induced L1 arrest associated with cryopreservation affected subsequent fecundity in recovered worms. A decrease in total life span and reproductive capacity of previously cryopreserved L1 versus controls was observed. Taken together, these results suggest that L1 arrest provides a method not only for surviving hard environmental conditions, but also for determining developmental and reproductive responses to environmental conditions.