Step 1: Understanding Bt bacteria.
Bacillus thuringiensis (Bt) is a soil bacterium that produces insecticidal crystal proteins (Cry proteins) toxic to insect larvae.
Step 2: Application.
These proteins are used in genetically modified crops (Bt cotton, Bt corn) to provide resistance against pests.
Step 3: Analyzing options.
(A) Agrobacterium: Incorrect — Used as a gene transfer vector in plants.
(B) Bacillus thuringiensis: Correct — Synthesizes insecticidal Cry proteins.
(C) Escherichia coli: Incorrect — Model organism, not insecticidal.
(D) Archaebacteria: Incorrect — Extremophiles, not related to insecticidal protein.
Step 4: Conclusion.
Thus, insecticidal protein is produced by Bacillus thuringiensis.