To develop a cost-effective biopesticide, spent mushroom substrate (SMS) extract was studied as a potential carbon source for cultivating Bacillus thuringiensis (Bt). Several pretreatments were compared to determine the optimal method for degrading cellulose to produce reducing sugars, including dilute sulfuric acid (0.5-2.0% v/v, 50-121 degrees C, 1 h), sodium hydroxide (0.5-2% w/v, 50-121 degrees C, 1 h), calcium hydroxide (0.2-4% w/v, 50-121 degrees C, 1 h), and hot water (50-121 degrees C, 1 h). Pretreatment was followed by standard enzymatic hydrolysis and fermentation. Results showed that the highest cellulose degradation was obtained using 2% dilute sulfuric acid pretreatment at 121 degrees C for 1 h, resulting in a high yield of reducing sugar (284.24 g/kg SMS). Sporulation was also highest using the same pretreatment. Use of SMS is not only an alternative way to commercialize Bt-based biopesticide, but also a potential solution for the environmental pollution associated with accumulation of the spent substrate of the mushroom industry. (C) 2013 Elsevier Ltd. All rights reserved.