Induced production of chitinase during bioconversion of starch industry wastewater (SIW) to Bacillus thuringiensis var. kurstaki HD-1 (Btk) based biopesticides was studied in shake flask as well as in computer-controlled fermentors. SIW was fortified with different concentrations (0%; 0.05%; 0.1%; 0.2%; 0.3% w/v) of colloidal chitin and its consequences were ascertained in terms of Btk growth (total cell count and viable spore count), chitinase, protease and amylase activities and entomotoxicity. At optimum concentration of 0.2% w/v colloidal chitin, the entomotoxicity of fermented broth and suspended pellet was enhanced from 12.4x10(9) (without chitin) to 14.4x10(9) SBU/L and from 18.2x10(9) (without chitin) to 25.1x10(9) SBU/L, respectively. Further, experiments were conducted for Btk growth in a computer-controlled 15 L bioreactor using SIW as a raw material with (0.2% w/v chitin, to induce chitinase) and without fortification of colloidal chitin. It was found that the total cell count, spore count, delta-endotoxin concentration (alkaline solubilised insecticidal crystal proteins), amylase and protease activities were reduced whereas the entomotoxicity and chitinase activity was increased with chitin fortification. The chitinase activity attained a maximum value at 24 h (15 mU/ml) and entomotoxicity of suspended pellet reached highest (26.7x10(9) SBU/L) at 36 h of fermentation with chitin supplementation of SIW. In control (without chitin), the highest value of entomotoxicity of suspended pellet (20.5x10(9) SBU/L) reached at 48 h of fermentation. A quantitative synergistic action of delta-endotoxin concentration, spore concentration and chitinase activity on the entomotoxicity against spruce budworm larvae was observed.