The present study studies the environmental and health effects of chemical pesticide use and quantified by using the Environmental impact quotient method (Kovach 1992). In order to compare the Environmental impact quotient (EIQ) a study was made on Bt and conventional cotton farmers in Dharmapuri district of Tamil Nadu. The study revealed that bollworm incidence was highly reduced in Bt cotton cultivation especially in fruiting stage of American bollworm and Pink bollworm. The quantity and frequency of pesticide application was also reduced in Bt cotton cultivation especially the quantity with a proportion of 93.61 per cent. The expenditure for the pesticides was high in conventional cotton as compared to Bt cotton by 77.19 per cent. The perception of farmers towards economic, environmental and social aspects favoured Bt cotton. The total environmental impact for conventional cotton with EIQ field rating was 157.76. The total environmental impact for Bt cotton with EIQ field rating was 16.23. Total environmental impact for pesticides in Bt cotton was low by 89.52 per cent as compared to conventional cotton due to the reduction of pesticides used for controlling Bollworm in Bt cotton. Hence farmers have to be educated about the ill effects of over use of plant protection chemicals in conventional cotton and to adopt the Bt farming technology to reduce the effect of pesticides on environment and ecosystem by conducting awareness programmes and crop seminars by the Agriculture Department.