We show that in nematic liquid crystals, the Casimir effect induced by thermal fluctuations of the orientational order is characterized by a short-range force due to fluctuations of the degree of order and biaxial excitations on top of the long-range interaction caused by director modes, the short-range corrections being important in the vicinity of the phase transition. In the isotropic phase the attraction is entirely short-range. In the case of finite surface coupling, both short- and long-range fluctuation-induced forces are weaker than in the strong anchoring limit. (C) 1998 Elsevier Science B.V. All rights reserved.