A 2‐year study investigated the relationship between the nematicides aldicarb and fosthiazate and populations of plant growth‐promoting (PGP) and plant‐growth‐inhibiting (PGI) bacteria, and root‐lesion nematodes and bacteria‐feeding nematodes in the root‐zone soils of potatoes. Fewer (P < 0.05) bacterial genera and species were recovered from aldicarb‐treated soils than from the fosthiazate and untreated soils but bacterial population densities were greatest in the aldicarb‐treated soils. In potato plantlet bioassays using root‐zone bacteria from the three soil sources, bacteria from the aldicarb‐treated soils reduced (P < 0.01) the mean wet and dry weight of shoots and roots compared with those from the fosthiazate and untreated soils. In the field, fosthiazate (but not aldicarb) significantly increased tuber yields and reduced nematode population densities of Pratylenchus penetrans in roots and soil. Population densities of bacteria‐feeding nematodes (primarily Diplogaster lheritieri) were not affected by either nematicide. Aldicarb appeared to suppress the populations of plant‐growth‐promoting bacteria that contribute to enhanced growth in potatoes. This is attributed to the long‐term use of aldicarb at the trial site, which may have encouraged the selection, or adaptation, of soil microorganisms that degrade carbamate pesticides but do not enhance potato growth.