Soil bacterium Bacillus thruingiensis (Bt) produces proteins that kill certain insects like lepidopterans (tobacco dudworm, armyworm), coleopterans (beetals) and dipterans (files, mosquitoes).Bacillus thuringinesis forms some intracellular protein crystals. These crystals contain a toxic insecticidal protein. The Bt toxin protein exists as inactive toxin and is coverted into an active form due to the alkaline pH of the alimentary canal that solubilities the crystals. The activated toxin binds to the surface of midgut epithelial cells and create pores which cause cell swelling and lysis and finally cause death of the insect.
So, the correct answer is 'Binds with epithelial cells of midgut of the insect pest ultimately killing it'