Many Bacillus thuringiensis isolates have no demonstrated toxicity against insects. In this study, a novel holotype crystal protein gene cry7Ba1 was isolated from a 'non-insecticidal'B. thuringiensis strain YBT-978. The Cry7Ba1 protein showed high toxicity against Plutella xylostella larvae after the crystals were dissolved at pH 12.5, suggesting that the 'non-insecticidal' properties of this protein were due to insolubility in the normal insect midgut pH environment. After the C-terminal half of Cry7Ba1 was replaced by that of Cry1Ac or Cry1C proteins, the recombinant protein inclusions could be dissolved at pH 9.5, and exhibited high toxicity against P. xylostella larvae. This result proved the insolubility of Cry7Ba1 crystal was determined by the structure of its C-terminal half. Further, six mutations were constructed by substituting cysteine residues with serine. Solubility studies showed that the crystals from mutants C697S, C834S and C854S could be dissolved at lower pH (10.5, 9.5 and 11.5 respectively). Bioassays showed that crystals from mutant C834S were toxic to P. xylostella larvae. Our discoveries suggest that a single cysteine residue located in the C-terminal half of the protein determines the solubility and toxicity of some nontoxic crystal proteins. This study provides a strategy to isolate novel insecticidal crystal protein genes from 'non-insecticidal'B. thuringiensis strains.