This paper reports the selection and characterization of Bacillus thuringiensis strains, with ability to grow in a proteo-chitinaceous substrate (milled shrimp waste) as the sole ingredient. Selected strains were able to produce crystal proteins, as well as proteases and chitinases as fermentation by-products. By a preliminary, qualitative screening of 152 B. thuringiensis strains, grown on media rich in protein and chitin, eight strains were selected. These strains were cultured in a liquid medium containing milled shrimp waste and their kinetics of protease production were followed. The two most active proteolytic strains (Bt-103 and Bt-112) were characterized by their crystal protein content, plasmid profiles, crystal ultrastructure, and toxicity towards Manduca sexta, Aedes aegypti and Leptinotarsa texana. The only activity recorded in these species was moderate toxicity of strain Bt-112 against Manduca sexta first instar larvae, as well as the highest proteolytic and chitinolytic activities. Its bipyramidal crystals were associated with semi-cuboidal inclusions and although its crystal proteins were similar to those of B. thuringiensis kurstaki (HD-1), its plasmid content was quite different. Serotyping of Bt-112 indicated that it belongs to serovar. tolworthi. Further studies with a similar strategy might render more strains with ability to grow in a rich waste by-product like the shrimp waste, which may show not only higher insecticidal activity, but also with the ability to produce extracellular enzymes with biotechnological applications.