Bacillus thuringiensis(Bt) three-domain Cry toxins are highly successful biological pesticides; however, the mechanism through which they cause death to targeted larval midgut cells is not fully understood. Herein, we challenged transgenic Bt-susceptibleDrosophila melanogasterlarvae with moderate doses of activated Cry1Ac toxin and assessed the midgut tissues after one, three, and five hours using transmission electron microscopy and transcriptome sequencing. Larvae treated with Cry1Ac showed dramatic changes to their midgut morphology, including shortened microvilli, enlarged vacuoles, thickened peritrophic membranes, and swelling of the basal labyrinth, suggesting water influx. Transcriptome analysis showed that innate immune responses were repressed, genes involved with cell death pathways were largely unchanged, and mitochondria-related genes were strongly upregulated following toxin exposure. Defective mitochondria produced after toxin exposure were likely to contribute to significant levels of oxidative stress, which represent a common physiological response to a range of toxic chemicals. Significant reductions in both mitochondrial aconitase activity and ATP levels in the midgut tissue supported a rapid increase in reactive oxygen species (ROS) following exposure to Cry1Ac. Overall, these findings support the role of water influx, midgut cell swelling, and ROS activity in response to moderate concentrations of Cry1Ac.