The area devoted to growing transgenic plants expressing insecticidal Cry proteins derived from Bacillus thuringiensis (Bt) is increasing worldwide. A major concern with the adoption of Bt crops is their potential impact on nontarget organisms including biological control organisms. Regulatory frameworks should advocate a step-wise (tiered) approach to assess possible nontarget effects of Bt crops. Laboratory and glasshouse studies have revealed effects on natural enemies only when Bt-susceptible, sublethally damaged herbivores were used as prey or host, with no indication of direct toxic effects. Field studies have confirmed that the abundance and activity of parasitoids and predators are similar in Bt and non-Bt crops. In contrast, applications of conventional insecticides have usually resulted in negative impacts on biological control organisms. Because Bt-transgenic varieties can lead to substantial reductions in insecticide use in some crops, they can contribute to integrated pest management systems with a strong biological control component.