The successful use of Bacillus thuringiensis insecticidal toxins to control agricultural pests could be undermined by the evolution of insect resistance. Under selection pressure in the laboratory, a number of insects have gained resistance to the toxins, and several cases of resistance in the diamondback moth have been reported from the field. The use of protein engineering to develop novel toxins active against resistant insects could offer a solution to this problem. The display of proteins on the surface of phages has been shown to be a powerful technology to search for proteins with new characteristics from combinatorial libraries. However, this potential of phage display to develop Cry toxins with new binding properties and new target specificities has hitherto not been realized because of the failure of displayed Cry toxins to bind their natural receptors. In this work we describe the construction of a display system in which the Cry1Ac toxin is fused to the amino terminus of the capsid protein D of bacteriophage lambda. The resultant phage was viable and infectious, and the displayed toxin interacted successfully with its natural receptor.The bacterium Bacillus thuringiensis produces insecticidal proteins during sporulation. These toxins are expressed as protoxins that are packaged into crystalline inclusions. When ingested by susceptible insect larvae, the protoxin is solubilized by the unique environment of the host gut and activated by proteolytic cleavage with gut enzymes. The activated toxins are able to bind to receptor molecules present on the insect gut epithelium and insert into the membrane (6). This membrane penetration results in the formation of pores which cause colloid osmotic lysis and eventual insect death (17,32,38).Due to their receptor specificity, Cry proteins are only toxic to certain insects and are harmless to other organisms, including humans, other mammals, fish, and most beneficial insects (31). B. thuringiensis is one of the few microbes that have been successfully used in agricultural insect pest control. Liquid and powder formulation mixtures of spores and crystals from this bacterium have been used for more than 40 years on many crops. B. thuringiensis toxin genes have also been successfully expressed in plants, providing environmentally benign control of insect pests (11).Although in the past it was hoped that insects would not develop resistance to these toxins, insect resistance to B. thuringiensis toxins has been detected in insect populations, mainly in the laboratory, but also in the field (8, 36).One possible way of overcoming the problem of resistance is to generate novel toxins by genetic manipulation of B. thuringiensis genes. Several combinatorial methods are now available to create large libraries of mutant proteins that can be searched for toxins with higher potency and different specificities. However, the rate-limiting step is the selection of valuable proteins from the mutant pool.One way to overcome this problem is to display libraries of peptides or protei...