Abstract Background Toxins from the Bacillus thuringiensis (Bt) bacterium are employed as an alternative to synthetic pesticides in pest management. The greatest threat to the long-term viability of Bt toxins is resistance evolution in the target pests. Genetic diversity and toxicity of Bt isolates were studied in this work in order to find Bt isolates with novel cry genes. Results In terms of colony morphology, among a total of 60 isolates, 51 isolates had off-white colour colonies with typical fried egg appearance, irregular shape, flat and undulate margin. Different crystal shapes, viz. spherical (88.13%), bipyramidal (49.15%), cuboidal (42.37%), rectangular, and crystals attached to spores (3.38%) were observed among Bt isolates. SDS-PAGE analysis of spore crystal mixture showed the presence of proteins with various molecular weights ranging from 124 to 26 kDa. PCR screening with cry1, cry2, cry9 and vip3A1 primers showed isolates with varied insecticidal gene combinations. Bt isolates containing cry1 genes were found to be abundant (30), followed by cry2 (9) and vip3A1 (9). Cry9 was absent in all the 60 isolates tested. Insecticidal activity of spore crystal mixtures ranged from 0 to 100% mortality. Furthermore, 12 isolates were found to be highly toxic against the larvae of diamondback moth, Plutella xylostella (L.) (Plutellidae: Lepidoptera) with 100% mortality, at 25 µg/ml in leaf disc bioassay. Conclusions The present work established the diversity of Bt isolates and confirmed the importance of continuous exploration of new Bt isolates for novel genes. Further, research needs to be carried out to unveil the hidden potential of these toxic isolates.