The complex life cycle of the parasitic nematode Strongyloides stercoralis leads to either developmental arrest of infectious third-stage larvae (iL3) or growth to reproductive adults. In the free-living nematode Caenorhabditis elegans, analogous determination between dauer arrest and reproductive growth is governed by dafachronic acids (DAs), a class of steroid hormones that are ligands for the nuclear hormone receptor DAF-12. Biosynthesis of DAs requires the cytochrome P450 (CYP) DAF-9. We tested the hypothesis that DAs also regulate S. stercoralis development via DAF-12 signaling at three points. First, we found that 1 μM Δ7-DA stimulated 100% of post-parasitic first-stage larvae (L1s) to develop to free-living adults instead of iL3 at 37°C, while 69.4±12.0% (SD) of post-parasitic L1s developed to iL3 in controls. Second, we found that 1 μM Δ7-DA prevented post-free-living iL3 arrest and stimulated 85.2±16.9% of larvae to develop to free-living rhabditiform third- and fourth-stages, compared to 0% in the control. This induction required 24–48 hours of Δ7-DA exposure. Third, we found that the CYP inhibitor ketoconazole prevented iL3 feeding in host-like conditions, with only 5.6±2.9% of iL3 feeding in 40 μM ketoconazole, compared to 98.8±0.4% in the positive control. This inhibition was partially rescued by Δ7-DA, with 71.2±16.4% of iL3 feeding in 400 nM Δ7-DA and 35 μM ketoconazole, providing the first evidence of endogenous DA production in S. stercoralis. We then characterized the 26 CYP-encoding genes in S. stercoralis and identified a homolog with sequence and developmental regulation similar to DAF-9. Overall, these data demonstrate that DAF-12 signaling regulates S. stercoralis development, showing that in the post-parasitic generation, loss of DAF-12 signaling favors iL3 arrest, while increased DAF-12 signaling favors reproductive development; that in the post-free-living generation, absence of DAF-12 signaling is crucial for iL3 arrest; and that endogenous DA production regulates iL3 activation.