Many species of parasitoid wasps inject polydnavirus particles in order to manipulate host defenses and development. Because the DNA packaged in these particles encodes almost no viral structural proteins, their relation to viruses has been debated. Characterization of complementary DNAs derived from braconid wasp ovaries identified genes encoding subunits of a viral RNA polymerase and structural components of polydnavirus particles related most closely to those of nudiviruses—a sister group of baculoviruses. The conservation of this viral machinery in different braconid wasp lineages sharing polydnaviruses suggests that parasitoid wasps incorporated a nudivirus-related genome into their own genetic material. We found that the nudiviral genes themselves are no longer packaged but are actively transcribed and produce particles used to deliver genes essential for successful parasitism in lepidopteran hosts.