Bacillus thuringiensis Cry1I insecticidal proteins are structurally similar to other three-domain Cry proteins, although their size, activity spectrum, and expression at the stationary phase are unique among other members of the Cry1 family. The mode of action of Cry1 proteins is not completely understood but the existence of an activation step prior to specific binding is widely accepted. In this study, we attempted to characterize and determine the importance of the activation process in the mode of action of Cry1I, as Cry1Ia protoxin or its partially processed form showed significantly higher toxicity to Ostrinia nubilalis than the fully processed protein either activated with trypsin or with O. nubilalis midgut juice. Oligomerization studies showed that Cry1Ia protoxin, in solution, formed dimers spontaneously, and the incubation of Cry1Ia protoxin with O. nubilalis brush border membrane vesicles (BBMV) promoted the formation of dimers of the partially processed form. While no oligomerization of fully activated proteins after incubation with BBMV was detected. The results of the in vitro competition assays showed that both the Cry1Ia protoxin and the approx. 50 kDa activated proteins bind specifically to the O. nubilalis BBMV and compete for the same binding sites. Accordingly, the in vivo binding competition assays show a decrease in toxicity following the addition of an excess of 50 kDa activated protein. Consequently, as full activation of Cry1I protein diminishes its toxicity against lepidopterans, preventing or decelerating proteolysis might increase the efficacy of this protein in Bt-based products.