Soil Microbial Biomass C (MBC) and the functional diversity of soil bacteria were evaluated in a field experiment with Roundup-Ready (RR) canola and corn (i.e., modified to be resistant to Roundup herbicide), and Bt corn and potatoes (i.e., modified to express genes of Bacillus thuringiensis encoding insecticidal proteins) from 2002 to 2004. The crops were grown in monoculture, with or without their respective pesticides, and in rotations. Bulk soil (sampled between corn rows) and rhizosphere soil (from corn roots) were sampled in all treatments. Combined analysis of 3-year data revealed that Bt corn in monoculture had the lowest MBC in bulk soil, but growing Bt corn in rotation with pesticide-resistant canola and potatoes mitigated this effect. There were no significant effects in corn rhizosphere although similar trends were observed. Differences in functional diversity of soil bacteria were not detected in the 3-year analysis, either in bulk soil or rhizosphere. However, annual analysis of the data showed that in 2002 in bulk soil, Shannon index (H') of diversity was lowest in genetically modified (Bt or RR) corn, intermediate in conventional corn (grown with or without pesticides), and greatest in corn grown in rotation with canola and potatoes. Because these effects were more pronounced in bulk soil than in the rhizosphere, they probably resulted from decomposition of crop residues from the preceding crop rather than root exudates from the sampled crop.