Diamondback moth (DBM), Plutella xylostella, is a worldwide devastating pest of Brassicaceae, and is well known as one of the most difficult pests to control, because of its wide distribution, rapid reproduction, and high resistance to agrochemicals. Bacillus thuringiensis (Bt)-based insecticides plays a key role of great importance in bio-control of DBM. DBM is the first pest species that evolves resistance to Bt Cry toxins in outdoor fields, and its resistance development and associated underlying mechanisms have received global attention. This paper first summarizes the global infestation of DBM and previous studies on its insecticide resistance, and elaborates the Bt story of discovery, development and application, and then further analyzes the DBM resistance to Bt toxins and resistance mechanisms. In addition, prospects on risks of resistance development, cultivation of transgenic oilseed crops, as well as further investigation on resistance mechanisms are discussed in some detail, with the hope to provide strategies for development of optimal resistance management and sustainable utility of Bt-based insecticides and Bt-transgenic crops.