Photorhabdus temperata is a symbiont of the entomopathogenic nematode Heterorhabditis bacteriophora and an insect pathogen. This bacterium produces a wide variety of virulence factors and hemolytic activity. The goal of this study was to identify hemolysin-defective mutants and test their virulence. A genetic approach was used to identify mutants with altered hemolytic activity by screening a library of 10 000 P. temperata transposon mutants. Three classes of mutants were identified: (i) defective (no hemolytic activity), (ii) delayed (delayed initiation of hemolytic activity), and (iii) early (early initiation of hemolytic activity). The transposon insertion sites for these mutants were identified and used to investigate other physiological properties, including insect pathogenesis and motility. The hemolysin-defective mutants, P10A-C11, P10A-H12, and P79-B5, had inserts in genes involved in RNA turnover (RNase II and 5'-pentaphospho-5'-adenosine pyrophosphohydrolase) and showed reduced virulence and production of extracellular factors. These data support the role of RNA turnover in insect pathogenesis and other physiological functions.