Photorhabdus are insect pathogenic bacteria that replicate within the insect haemocoel following release from their entomopathogenic nematode symbionts. To investigate how they escape the cellular immune response we examined the effects of two strains of Photorhabdus, W14 and K122, on Manduca sexta phagocytes (haemocytes), in vitro and in vivo. Following injection of Esherichia coli into Manduca larvae, these non-pathogenic bacteria are rapidly cleared from the haemolymph and the number of free haemocytes transiently increases. In contrast, following injection of either strain of pathogenic Photorhabdus, the bacteria grow rapidly while the number of haemocytes decreases dramatically. In vitro incubation of haemocytes with either Photorhabdus supernatant reduced haemocyte viability, and the W14 supernatant caused distinct changes in the actin cytoskeleton morphology of different haemocyte cell types. In phagocytosis assays both Photorhabdus strains can inhibit their own phagocytosis whether the bacterial cells are alive or dead. Further, the supernatant of W14 also contains a factor capable of inhibiting the phagocytosis of labelled E. coli. Together these results suggest that Photorhabdus evades the cellular immune response by killing haemocytes and suppressing phagocytosis by mechanisms that differ between strains.