Studies in anhydrobiotic plants have defined many genes which are upregulated during desiccation, but comparable studies in invertebrates are at an early stage. To develop a better understanding of invertebrate anhydrobiosis, we have begun to characterise dehydration-inducible genes and their proteins in anhydrobiotic nematodes and bdelloid rotifers; this review emphasises recent findings with a hydrophilic nematode protein. Initial work with the fungivorous nematode Aphelenchus avenae led to the identification of two genes, both of which were markedly induced on slow drying (90–98% relative humidity, 24 hr) and also by osmotic stress, but not by heat or cold or oxidative stresses. The first of these genes encodes a novel protein we have named anhydrin; it is a small, basic polypeptide, with no counterparts in sequence databases, which is predicted to be natively unstructured and highly hydrophilic. The second is a member of the Group 3 LEA protein family; this and other families of LEA proteins are widely described in plants, where they are most commonly associated with the acquisition of desiccation tolerance in maturing seeds. Like anhydrin, the nematode LEA protein, Aav-LEA-1, is highly hydrophilic and a recombinant form has been shown to be unstructured in solution. In vitro functional studies suggest that Aav-LEA-1 is able to stabilise other proteins against desiccation-induced aggregation, which is in keeping with a role of LEA proteins in anhydrobiosis. In vivo, however, Aav-LEA-1 is apparently processed into smaller forms during desiccation. A processing activity was found in protein extracts of dehydrated, but not hydrated, nematodes; these shorter polypeptides are also active anti-aggregants and we hypothesise that processing LEA protein serves to increase the number of active molecules available to the dehydrating animal. Other LEA-like proteins are being identified in nematodes and it seems likely therefore that they will play a major role in the molecular anhydrobiology of invertebrates, as they are thought to do in plants.