The abilities of Bacillus polymyxa and Bacillus thuringiensis to survive on the rice phyllospere were compared; it was found that B. polymyxa colonizes the crop better. This study also showed that B. polymyxa inoculation to rice plants increased the shoot and the root growth of the crop. Efforts were made to introduce the cry1Ac gene of B. thuringiensis subsp. kurstaki into B. polymyxa so that the application of such transgenic B. polymyxa strains would prove to be dually beneficial to rice crops both as a biopesticide and as a biofertilizer. Immunoblot analysis of the recombinant organism containing the cry1Ac gene, strain BP113, indicated efficient expression of this gene in the heterologous host. Bioassays with the first instar larvae of the yellow stem borer of rice (Scirpophaga incertulas) revealed that the protein preparations from BP113 were toxic.