Transgenic crops producing insecticidal toxins from Bacillus thuringiensis (Bt) are widely used for pest control. Bt-resistant insect strains have been studied, but the molecular basis of resistance has remained elusive. Here, we show that disruption of a cadherin-superfamily gene by retrotransposon-mediated insertion was linked to high levels of resistance to the Bt toxin Cry1Ac in the cotton pest Heliothis virescens. Monitoring the early phases of Bt resistance evolution in the field has been viewed as crucial but extremely difficult, especially when resistance is recessive. Our findings enable efficient DNA-based screening for resistant heterozygotes by directly detecting the recessive allele.