Bacillus thuringiensis is the most widely applied biological pesticide used to control insects that affect agriculture and forestry and which transmit human and animal pathogens. During the past decades B. thuringiensis has been the subject of intensive research. These efforts have yielded considerable data about the relationships between the structure, mechanism of action, and genetics of their pesticidal crystal proteins. As a result, a coherent picture of these relationships has emerged. Other studies have focused on the ecological role of the B. thuringiensis crystal proteins and their performance in agricultural and other natural settings. With this knowledge as background and the help of biotechnological tools, researchers are now reporting promising results in the development of more useful toxins, recombinant bacteria, new formulations and transgenic plants that express pesticidal activity, in order to assure that these products are utilized with the best efficiency and benefit. This article is an attempt to integrate all these recent developments in the study of B. thuringiensis into a context of biological control of lepidopteran insect pest of agricultural importance.