Bacillus thuringiensis produces several larvicidal crystalline inclusions during sporulation. An understanding of their mechanisms of action is commercially important. In this study, two toxins, CrylAb and CrylAc, were compared that showed 98% amino acid identity in domain I and II, but differed significantly in domain III. Using site-directed mutagenesis techniques, two conserved loop 2 Arg's ((RR369)-R-368) of CrylAb and CrylAc toxins were replaced with Ala ((368)AR(369), (368)RA(369), (368)AA(369)), Glu ((EE369)-E-368), Phe ((FF369)-F-368), HiS ((HH369)-H-368), and Lys ((KK369)-K-368). The effect of these mutants on structural stability, larvicidal potency, receptor binding, and ionic permeability towards two important cotton pests, pink bollworm (Pectinophora gossypiella) and bollworm (Helicoverpa zea) were analyzed. All seven mutants of CrylAb, excluding (368)AR(369), produced a stable protoxin, whereas for CrylAc all seven mutants yielded stable protoxin. Results showed that all the stable mutants behaved similarly to the wild type on incubation with trypsin and gut extract of both insect larvae. The CrylAb mutants, (368)AR(369), (368)AA(369), (FF369)-F-368, and (HH369)-H-368, lost toxicity; (EE369)-E-368 had reduced toxicity; whereas the more conserved change (KK369)-K-368 retained the toxicity similar to the wild type towards P. gossypiella. Double mutants of CrylAc, (368)AA(369) and (FF369)-F-368, abolished the toxicity. Double mutant (KK369)-K-368 of CrylAc retained its toxicity against P. gossypiella, whereas single mutants (368)AR(369), (368)RA(369), and (HH369)-H-368 retained only reduced toxicity. All the mutants of CrylAb lost their toxicity against H. zea except (KK369)-K-368. In CrylAc single mutants, (368)AR(369) and (368)RA(369), reduction in the toxicity was observed. A double mutant of CrylAc, (KK369)-K-368, also retained reduced toxicity. All the other double mutants lost their toxicity. Voltage clamping experiments on H. zea midguts provided an additional evidence about the insecticidal property and inhibition of I-sc across the transepithelial membrane of the insect midgut.