The objective of this study was to compare the cost of conventional control of tobacco budworms and cotton bollworms with the cost of genetically engineered Bt cotton. Tobacco budworm and bollworm control expenditures reported by Tennessee farmers in a 1997 survey were used to estimate the cost of conventional control. The cost of conventional control was compared with the costs of two Bt cotton production scenarios using break-even analysis. Bt cotton was not a profitable alternative to conventional control under typical infestation levels; however, in years of heavy infestation, Bt cotton may be a viable alternative to conventional insect control methods.