Bt is a type of toxin. It is made from a bacteria called Bacillus thurigiensis (in brief Bt).
Bt toxin gets cloned from gene bacteria and get expressed in plants and creates resistance against insects (pests). As a result, there is no need to use pesticides. This is how biopesticides are manufactured, e.g. : Bt cotton, Bt corn, rice, tomato and potato etc.
Bt Cotton : Some breeds of Bacillus thuringiensis produce such proteins that are helpful in killing specific insects like lapidopterans (tobacco bud worm, soldier worm), coleopterans (beetles) and dipterans (flies and mosquitoes). Bt produces some toxic insecticidal proteins. Why does this toxin not kill the Bacillus? In fact, the Bt toxin protein, protoxin is in an active form, as soon as the insect eats this inactive toxin, alkaline pH changes it in its intestine. Due to this, they become soluble and get converted into active form. Active toxin bind to the surface of epithelial cells of the middle intestine and form holes in them due to which the cell swell and burst and as a result the insect dies.
The specific Bt toxin has been isolated from Bt and has been incorporated into many crops like cotton. The choice of genes depends on the crop and the specific pest. Whereas most Bt toxins depend on insect group specificity.