The small ruminant parasite Haemonchus contortus is the most widely used parasitic nematode in drug discovery, vaccine development and anthelmintic resistance research. Its remarkable propensity to develop resistance threatens the viability of the sheep industry in many regions of the world and provides a cautionary example of the effect of mass drug administration to control parasitic nematodes. Its phylogenetic position makes it particularly well placed for comparison with the free-living nematode Caenorhabditis elegans and the most economically important parasites of livestock and humans. Here we report the detailed analysis of a draft genome assembly and extensive transcriptomic dataset for H. contortus. This represents the first genome to be published for a strongylid nematode and the most extensive transcriptomic dataset for any parasitic nematode reported to date. We show a general pattern of conservation of genome structure and gene content between H. contortus and C. elegans, but also a dramatic expansion of important parasite gene families. We identify genes involved in parasite-specific pathways such as blood feeding, neurological function, and drug metabolism. In particular, we describe complete gene repertoires for known drug target families, providing the most comprehensive understanding yet of the action of several important anthelmintics. Also, we identify a set of genes enriched in the parasitic stages of the lifecycle and the parasite gut that provide a rich source of vaccine and drug target candidates. The H. contortus genome and transcriptome provide an essential platform for postgenomic research in this and other important strongylid parasites.