Bacillus thuringiensis (or Bt) is a Gram-positive, soil-dwelling bacterium, commonly used as a biological pesticide; alternatively, the Cry toxin may be extracted and used as a pesticide. B. thuringiensis also occurs naturally in the gut of caterpillars of various types of moths and butterflies, as well on leaf surfaces, aquatic environments, animal feces, insect rich environments, flour mills and grain storage facilities.
During sporulation, many Bt strains produce crystal proteins (proteinaceous inclusions), called δ-endotoxins, that have insecticidal action. This has led to their use as insecticides, and more recently to genetically modified crops using Bt genes. Many crystal-producing Bt strains, though, do not have insecticidal properties.
Read more about Bacillus Thuringiensis: Discovery and Study, Use in Pest Control