The undertaken project “Impact of Bt and non-Bt cotton on insect biodiversity” was carried out for two cotton seasons, 2006-07, which included the survey and experimentations. The survey study was conducted to know the farmers’ perception of insect pests and pest management practices in Bt cotton. The experimentations were consisted the field and laboratory experiments. The field experiments were conducted to determine the impact of transgenic Bt cotton on the target and non-target insect community in replicated field trails under sprayed and unsprayed conditions, in comparisons with its parent non-Bt conventional cotton. The laboratory experiments were conducted to evaluate the impact of Bt toxin on the biological traits (larval mortality, larval development time and pupal weight) of Helicoverpa armigera and Spodoptera exigua by feeding larvae on the leaves and flower-bolls of Bt and non-Bt cotton. The results revealed that transgenic Bt cotton (IR-FH-901), containing Cry1Ac proved to be highly effective against specific lepidopterous pests and the susceptibility of target pests was in the order of american bollworm> spotted bollworm> pink bollworm >armyworm. The pooled data of all observations showed significantly lower population of bollworm complex (american, spotted and pink bollworms) in Bt cotton. Bt cotton proved not to be so effective against armyworm but some sub-lethal effects have been observed in term of increased larval development time and reduction in pupal weight. It was not effective against sucking insect pests and average 3-4 insecticide applications were used to control these pests in sprayed plots of Bt and non-Bt cotton. The diversities of non-target insect community and sub-communities (pests, beneficials, pollinators and visitors) as measured by Shannon-Weaver diversity index showed no significant differences in species abundance, richness, diversity and evenness in the unsprayed Bt and non-Bt cotton during two successive years. But the differences were found between sprayed and unsprayed plots. The higher diversity indices in insecticide treated plots suggest that insecticide sprays had a significant impact in eliminating the rare species and hence increased the diversity due to higher evenness among the species. The reduced insecticide use in Bt cotton increased the stability of rare species and have a positive impact on beneficial insect community. The seed treatment in transgenic Bt cotton proved to be very effective in controlling sucking insect pests complex during early stages of crop. Although, Bt cotton significantly reduced the use of insecticides against bollworms, but farmers still relied heavily on the chemicals to control these pests, as they were not sure of its effectiveness against target pests, because, they were easily convinced by the commercial advertisements of pesticide companies. The results revealed that the judicious use of insecticides in Bt cotton at economic threshold level was provided the salubrious conditions for beneficial insects conservation. The efficacy of Bt insecticidal protein in different plant parts was in the order of leaves>flower-bolls. The increased larval population in Bt cotton at later stages of crop indicated spatial and temporal variation of Cry1Ac toxin expression. The studies highlight that researchers, technology providers and administrators should ensure the effective and highest level of Bt toxin expression in appropriate plant parts at the requisite time, particularly late in the season.