Although integrated pest management (IPM) strategies have been developed worldwide, further improvement of IPM effectiveness is required. The use of transgenic technology to create insect-resistant plants can offer a solution to the limited availability of highly insect-resistant cultivars. Commercially available insect-resistant transgenic crops show clear benefits for agriculture and there are many exciting new developments such as transgenic plants that enhance biological control. Effective evaluation tools are needed to ascertain that transgenic plants do not result in undesired non-target effects. If these conditions are met, there will be ample opportunities for transgenic plants to become key components of environmentally benign and durable pest management systems. Here we discuss the potential and challenges for incorporating transgenic plants in IPM.