To study the effect of Bt cotton on soil properties, thirty representative surface soil samples were collected under three variants (12 samples each from Bt cotton cultivated areas continuously for 2-5 years, 8-10 years and 6 samples from areas under non Bt cotton) in the cotton growing belt of Guntur district. The samples were analysed for soil chemical, physico-chemical and biological properties. All the soil samples were slightly alkaline in reaction, low in organic carbon and nitrogen, medium to high in phosphorus, very high in potassium. Microbial biomass carbon and dehydrogenase activity were more in non Bt soils compared to Bt soils. A positive correlation was noticed between dehydrogenase activity and microbial biomass carbon. The population of functional groups of bacteria was more in non Bt soils compared to Bt soils but significant differences were noticed only with respect to Rhizobium population. The differences caused by growing Bt cotton were not as large as those resulting from seasonal changes indicating that effect of Bt cotton on soil ecology was within normal variation expected in conventional agriculture.