The present study investigated prey-mediated effects of two maize varieties expressing a truncated Cry1Ab, Compa CB (event Bt176) and DKC7565 (event MON810), on the biology of the ladybird Stethorus punctillum. Although immuno-assays demonstrated the presence of Cry1Ab in both prey and predator collected from commercial maize-growing fields, neither transgenic variety had any negative effects on survival of the predator, nor on the developmental time through to adulthood. Furthermore, no subsequent effects on ladybird fecundity were observed. As a prerequisite to studying the interaction of ladybird proteases with Cry1Ab, proteases were characterised using a range of natural and synthetic substrates with diagnostic inhibitors. These results demonstrated that this predator utilises both serine and cysteine proteases for digestion. In vitro studies demonstrated that T. urticae were not able to process or hydrolyze Cry1Ab, suggesting that the toxin passes through the prey to the third trophic level undegraded, thus presumably retaining its insecticidal properties. In contrast, S. punctillum was able to activate the 130 kDa protoxin into the 65 kDa fragment; a fragment of similar size was also obtained with bovine trypsin, which is known to cleave the protoxin to the active form. Thus, despite a potential hazard to the ladybird of Bt-expressing maize (since the predator was both exposed to, and able to proteolytically cleave the toxin, at least in vitro), no deleterious effects were observed.