Xenorhabdus nematophila secretes insecticidal proteins to kill its larval prey. We have isolated an approximately 58-kDa GroEL homolog, secreted in the culture medium through outer membrane vesicles. The protein was orally insecticidal to the major crop pest Helicoverpa armigera with an LC50 of approximately 3.6 microg/g diet. For optimal insecticidal activity all three domains of the protein, apical, intermediate, and equatorial, were necessary. The apical domain alone was able to bind to the larval gut membranes and manifest low level insecticidal activity. At equimolar concentrations, the apical domain contained approximately one-third and the apical-intermediate domain approximately one-half bioactivity of that of the full-length protein. Interaction of the protein with the larval gut membrane was specifically inhibited by N-acetylglucosamine and chito-oligosaccharides. Treatment of the larval gut membranes with chitinase abolished protein binding. Based on the three-dimensional structural model, mutational analysis demonstrated that surface-exposed residues Thr-347 and Ser-356 in the apical domain were crucial for both binding to the gut epithelium and insecticidal activity. Double mutant T347A,S356A was 80% less toxic (p < 0.001) than the wild type protein. The GroEL homolog showed alpha-chitin binding activity with Kd approximately 0.64 microm and Bmax approximately 4.68 micromol/g chitin. The variation in chitin binding activity of the mutant proteins was in good agreement with membrane binding characteristics and insecticidal activity. The less toxic double mutant XnGroEL showed an approximately 8-fold increase of Kd in chitin binding assay. Our results demonstrate that X. nematophila secretes an insecticidal GroEL protein with chitin binding activity.