In order to protect cotton plants from insect infection, mode of action of Bt toxin is:

Once an insect ingest the inactive Bt toxin, it is converted into an active form of toxin due to the alkaline pH of the gut which solubilise the crystals. The activated toxin binds to the surface of midgut epithelial cells and create pores that cause cell swelling and lysis and eventually cause death of the insect.