Bt crops, predominantly maize and cotton hybrids, transgenically expressing cry genes derived from Bacillus thuringiensis, were planted on approximately 14 million hectares (worldwide) in 1999. Preliminary reports suggest that in most cases pesticide use was reduced, and in some situations there were significant increases in yields and profits. However, assemblages of secondary pests, such as aphids, plant bugs and thrips, also exist in Bt crops, and although the overall need for scouting and chemical control is reduced in Bt crops, there may be a requirement for additional, conventionally applied chemicals to control such non-target pests. Naturally-occurring Bt toxins with activity against a wide variety of pest species have been discovered and are thus potentially available for engineering into Bt crops to control a broader spectrum of pests than are currently targeted. New Bt crops and second-generation products incorporating an expanding range of Cry toxins and other arthropod targeted genes are in development and could become available for introduction to the market within the next few years. Insecticide resistance management (IRM) strategies for Bt crops are reviewed in the context of studies on selection pressures and the potential for resistance development in target populations. The so-called, high-dose strategy, combined with the use of refuges, is widely agreed to be the best technical approach for managing resistance, and evidence is accumulating that 'separate' refuges are more effective at conserving pest susceptibility than 'mixed' refuges. A widespread consensus on the necessity for such measures, and an appreciation of the importance of multi-tactical approaches, has developed. Monitoring programmes, protocols and studies relevant to detecting the early development of resistance to Bt Cry toxins are described. Field monitoring of non-target entomofauna has not revealed significant differences in the abundance or biodiversity of beneficial insects associated with Bt maize. Indeed, laboratory studies of effects on parasitoids suggest that Bt plants may even have an environmental advantage over broad spectrum pesticides. However, more complex, multi-trophic, long-term experiments are needed to thoroughly assess the compatibility of Bt crops with non-target invertebrates and to define the complex relationship between IRM, target species and their natural enemy assemblages. Studies on the effects of transgenically-expressed Cry toxins on non-target insects, and their persistence in soil and on leaves, is reviewed. It is suggested that there is currently no generally agreed framework, or methodology, within which ad hoc experimental results can be accommodated, and each crop-transgene combination has to be assessed on a case-by-case basis. Studies proposing a conceptual approach to evaluating risks associated with Bt crops are highlighted and potential benefits and hazards are reviewed.