Healthy soils are essential for sustainable agricultural development and soil health requires careful assessment with increasing societal concern over environmentally friendly agricultural development. Soil health is the capacity of soil to function within ecological boundaries to sustain productivity, maintain environmental quality, and promote plant and animal health. Physical, chemical and biological indicators are used to evaluate soil health; the biological indicators include microbes, protozoa and metazoa. Nematodes are the most abundant metazoa and they vary in their sensitivity to pollutants and environmental disturbance. Soil nematode communities are useful biological indicators of soil health, with community characteristics such as abundance, diversity, community structure and metabolic footprint all closely correlated with the soil environment. The community size, complexity and structure reflect the condition of the soil. Both free-living and plant-parasitic nematodes are effective ecological indicators, contributing to nutrient cycling and having important roles as primary, secondary and tertiary consumers in food webs. Tillage inversion, cropping patterns and nutrient management may have strong effects on soil nematodes, with changes in soil nematode communities reflecting soil disturbance. Some free-living nematodes serve as biological models to test soil condition in the laboratory and because of these advantages soil nematodes are increasingly being used as biological indicators of soil health.