The overall goal of this paper is to reexamine findings of earlier efforts that analysed the effect of Bt cotton adoption in 1999 with two follow-up surveys conducted in 2000 and 2001. Our survey data on yields and econometric analyses indicate that the adoption of Bt cotton continues to increase output per hectare in 2000 and 2001 and that the yield gains extend to all provinces in our sample. More importantly, Bt cotton farmers also increased their incomes by being reducing use of pesticides and labour inputs. Finally, survey data shows that Bt cotton continues to have positive environmental impacts by reducing pesticide use. We provide evidence that farmers have less health problems because of reduced pesticide use. We conclude with evidence that China is not unique and that there are lessons for other developing countries in their experience.