The current strategy of using transgenic crops expressing insecticidal protein toxins is placing increasing emphasis on the discovery of novel toxins, beyond those already derived from the bacterium Bacillus thuringiensis. Here we review the cloning of four insecticidal toxin complex (tc) encoding genes from a different bacterium Photorhabdus luminescens and of similar gene sequences from Xenorhabdus nematophilus. Both these bacteria occupy the gut of entomopathogenic nematodes and are released into the insect upon invasion by the nematode. In the insect the bacteria presumably secrete these insecticidal toxins, as well as a range of other antimicrobials, to establish the insect cadaver as a monocultural breeding ground for both bacteria and nematodes. In this review, the protein biochemistry and structure of the tc encoding loci are discussed in relation to their observed toxicity and histopathology. These toxins may prove useful as alternatives to those derived from B. thuringiensis for deployment in insect-resistant transgenic plants.