Studies were conducted to optimise inoculum quantity and total solids concentration for the production of Bacillus thuringiensis (Bt) based biopesticides using wastewater sludge as a raw material in shake flasks and 15 1 fermenters. The sludge used was a mixture of primary and secondary sludges. Two different Bt strains were employed, Bacillus thuringiensis kurstaki HD-1 (Btk) and a new strain (Bta) isolated from sewage sludge. Preparation of inoculum in the same sludge as that used for the production medium resulted in higher cell and spore counts, specific growth rate and entomotoxicity value. The final cell count and entomotoxicity achieved at the end of fermentation depended on the amount of inoculum used. A cell count of 2.2 x 10(9) and 3.6 x 10(9) CFU/ml was observed at 2% (v/v) and 3% (v/v) inoculum volume, respectively. A lower cell count was recorded at 1, 4 and 5% (v/v) inoculum concentration. Bioassay results also revealed that a 2%(v/v) inoculum furnished higher entomotoxicity (12 900 IU/mul) against spruce budworm. The sludge solids concentration significantly influenced growth and entomotoxicity yield, Solids concentration of 46 g/1 using Btk resulted in decreased cell concentration (5.4 x 10(8) CFU/ml), spore concentration (4.8 x 10(8) CFU/ml) and low entomotoxicity (9743 IU/mul). The sporulation rate was 89%. The same phenomena was observed when a lower sludge solids concentration (10 g/1) was used, resulting in cell and spore concentrations of 4.3 x 10(8) and 3.9 x 10(8) CFU/ml, respectively, and potency of 8231 IU/mul. The optimum total solids concentration was 26 g/l, which resulted in an improved potency of 12 970 IU/mul, cell and spore concentrations of 5.0 x 10(9) and 4.8 x 10(8) CFU/ml, respectively, and a sporulation rate of 96%. A similar trend of growth and entomotoxicity at different sludge solids concentration was also observed with new Bt strain isolated from sewage sludge. The fermenter results showed that one of the reasons for inferior entomotoxicity at higher sludge solids was oxygen transfer limitation.