We examine the farm-level impact of Bt cotton in Coahuila, Mexico. Bt cotton was introduced in Mexico in 1996. It has been an important tool in reducing pesticide use by more than 50% and generating annual benefits of US$2.7 million. About 85% of benefits accrued to farmers and 15% to seed suppliers. Adopting farmers spent $100 less on pest control and had $295/ha higher net revenue than nonadopting farmers. The average holding of adopting farmers was 14 ha. Bt cotton has been a valuable technology for certain areas in Mexico. Cotton profitability and competitiveness have increased, and the risk of crop failure from insect infestation has been reduced. Victory over the pink bollworm, once the dominant insect pest, would not have been possible without Bt cotton. Because Bt cotton protects only against a certain spectrum of the pest population, national adoption stands at 33%. Permission granted by 'AgBioForum' to reproduce full article for the CD-ROM and abstract for the webpage.