Recent applications of biotechnology, especially genetic engineering, have revolutionized crop improvement and increased the availability of valuable new traits. A current example is the use of the insecticidal Cry proteins from the bacterium, Bacillus thuringiensis (Bt), to improve crops, known as Bt crops, by reducing injury from various crop pests. The adoption of genetically modified (GM) crops has increased dramatically in the last 11 years. However, the introduction of GM plants into agricultural ecosystems has raised a number of questions, including the ecological impact of these plants on soil ecosystems. Crop residues are the primary source of carbon in soil, and root exudates govern which organisms reside in the rhizosphere. Therefore, any change to the quality of crop residues and rhizosphere inputs could modify the dynamics of the composition and activity of organisms in soil. Insect-resistant Bt crops have the potential to change the microbial dynamics, biodiversity, and essential ecosystem functions in soil, because they usually produce insecticidal Cry proteins through all parts of the plant. It is crucial that risk assessment studies on the commercial use of Bt crops consider the impacts on organisms in soil. In general, few or no toxic effects of Cry proteins on woodlice, collembolans, mites, earthworms, nematodes, protozoa, and the activity of various enzymes in soil have been reported. Although some effects, ranging from no effect to minor and significant effects, of Bt plants on microbial communities in soil have been reported, using both culturing and molecular techniques, they were mostly the result of differences in geography, temperature, plant variety, and soil type and, in general, were transient and not related to the presence of the Cry proteins. The respiration (i.e., CO2 evolution) of soils cultivated with Bt maize or amended with biomass of Bt maize and other Bt crops was generally lower than from soils cultivated with or amended with biomass of the respective non-Bt isolines, which may have been a result of differences in chemical composition (e.g., the content of starch, soluble N, proteins, carbohydrates, lignin) between Bt plants and their near-isogenic counterparts. Laboratory and field studies have shown differences in the persistence of the Cry proteins in soil, which appear to be the result primarily of differences in microbial activity, which, in turn, is dependent on soil type (e.g., pH, clay mineral composition, other physicochemical characteristics), season (e.g., temperature, water tension), crop species (e.g., chemical composition, C:N ratio, plant part), crop management practices (e.g., till vs. no-till), and other environmental factors that vary with location and climate zones. This review discusses the available data on the effects of Cry proteins on below-ground organisms, the fate of these proteins in soil, the techniques and indicators that are available to study these aspects, and future directions. 