The ecological implications on biological control of insecticidal transgenic plants, which produce crystal (Cry) proteins from the soil bacterium Bacillus thuringiensis (Bt), remain a contentious issue and affect risk assessment decisions. In this study, we used a unique system of resistant insects, Bt plants and a parasitoid to critically evaluate this issue. The effects of broccoli type (normal or expressing Cry1Ac protein) and insect genotype (susceptible or Cry1Ac-resistant) of Plutella xylostella L. (Lepidoptera: Plutellidae) were examined for their effects on the development and host foraging behavior of the parasitoid, Diadegma insulare (Cresson) (Hymenoptera: Ichneumonidae) over two generations. Parasitism rate and development of D. insulare were not significantly different when different genotypes (Bt-resistant or susceptible) of insect host larvae fed on non-Bt broccoli plants. D. insulare could not discriminate between resistant and susceptible genotypes of P. xylostella, nor between Bt and normal broccoli plants with different genotypes of P. xylostella feeding on them. No D. insulare could emerge from Bt broccoli-fed susceptible and heterozygous P. xylostella larvae because these larvae were unable to survive on Bt broccoli. The parasitism rate, developmental period, pupal and adult weights of D. insulare that had developed on Bt broccoli-fed Cry1Ac-resistant P. xylostella larvae were not significantly different from those that developed on non-Bt broccoli-fed larvae. Female D. insulare emerged from Cry1Ac-resistant P. xylostella that fed on Bt plants could successfully parasitize P. xylostella larvae. The life parameters of the subsequent generation of D. insulare from P. xylostella reared on Bt broccoli were not significantly different from those from non-Bt broccoli. The Cry1Ac protein was detected in P. xylostella and in D. insulare when hosts fed on Bt broccoli. These results are the first to indicate that Cry1Ac did not harm the development or host acceptance of an important endoparasitoid after two generations of exposure. We suggest that using other Bt crops and resistant insect species would likely lead to similar conclusions about the safety of the presently used Bt proteins on parasitoids.