Occurrence of diversity in ecosystem sustains particular characteristic of a biological community and also ensures stability of the community. Transgenic crops may affect insect biodiversity by unintended impacts on non-target arthropod population. For example, transgenic GM cotton specific to target lepidopterous pests can change the cotton pest spectrum and may induce the growth of new harmful pest species having no pest status. The change in species composition may influence IPM approach in cotton crop. The results of authors' research studies as well as global impact indicate that GM cotton is highly specific to target pests and has no unintended impact on non-target insect population. GM cotton provides significant season-long field control of target pests (Helicoverpa armigera, Earias spp. and Pectinophora gossypiella), with no significant control of Spodoptera species. The decreased insecticide use in GM cotton has a positive impact on beneficial insect populations and can increase the stability of rare species. Bt cotton has no resistance against non-target sucking insect pests. As GM cotton has no adverse effects on the non-target insect population and can reduce the use of broad-spectrum insecticides, it can become an important tool of IPM program in cotton agro-ecosystem of Pakistan.