The farm-scale impacts of Bt crops on nontarget insects depend on the effects of Bt toxins on nontraget insects and on the effects of changes in farmer management practices following adoption of a Bt crops. A farm-scale evaluations in Arizona show that use of Bacillus thuringiensis (Bt) cotton and of Bt cotton tolerant to herbicides (BtHt) reduced use of broad-spectrum insecticides. Transgenic cotton had higher yield than non-transgenic cotton after controlling for the effects of insecticide applications and seeding rate. Cultivation of Bt and BtHt cotton had no significant effects on the diversity of nontarget insects compared to cultivation of non-Bt cotton. However, unlike Bt and BtHt cotton, broad-spectrum insecticides and insecticides mimicking insect juvenile hormones reduced the diversity of nontarget insects. Moreover, several other agronomic and environmental factors affected such diversity. Our comparison of Bt and non-Bt cotton indicates that cultivation of Bt cotton has positive environmental and economic effects without posing additional risks to nontarget insects.