Knowledge of how anthelmintics are metabolized and excreted in nematodes is an integral part of understanding the factors that determine their potency, spectrum of activity and for investigating mechanisms of resistance. Although there is remarkably little information on these processes in nematodes, it is often suggested that they are of minimal importance for the major anthelmintic drugs. Consequently, we have investigated how the model nematode Caenorhabditis elegans responds to and metabolizes albendazole, one of the most important anthelmintic drugs for human and animal use. Using a mutant strain lacking the β-tubulin drug target to minimize generalized stress responses, we show that the transcriptional response is dominated by genes encoding XMEs (xenobiotic-metabolizing enzymes), particularly cytochrome P450s and UGTs (UDP-glucuronosyl transferases). The most highly induced genes are predominantly expressed in the worm intestine, supporting their role in drug metabolism. HPLC-MS/MS revealed the production of two novel glucoside metabolites in C. elegans identifying a major difference in the biotransformation of this drug between nematodes and mammals. This is the first demonstration of metabolism of a therapeutic anthelmintic in C. elegans and provides a framework for its use to functionally investigate nematode anthelmintic metabolism.