Maize is the staple food for most South Africans. This implies that any damage to the maize crop will affect food security of many South Africans. Although Eastern Cape Province is not a traditionally maize producing area, smallholder farmers in the province produce it mostly for subsistence purposes and some sell the surplus on the local market or use it to secure other good through barter trading. In South Africa, insect-resistant Bt maize/yieldgard has been used commercially for approximately 10 years now. Available impact studies on Bt maize reveal that, this technology is beneficial not only to farmers but consumers of maize products as well. Welfare gains as well as positive effects for human health are realised by both groups. Due to the costs and effectiveness associated with traditional and conventional maize stem borer control methods, Bt technology has the potential to be part of the solution. This thesis has attempted to investigate the economic viability of planting Bt maize seeds under smallholder farming conditions and identify factors as well as perceptions relating to attributes of Bt maize and to analyze the relationships between those perceptions and choices regarding use of Bt technology. Data was collected from 90 households who were selected using purposive sampling through the use of the snowball method. To collect data, a questionnaire was administered through face-to-face interviews. Gross margin analysis revealed that Bt maize is a more profitable option as compared to conventional maize seeds. Furthermore, econometric analyses, through use of the binomial regression model revealed that perceptions could be used to distinguish between users and non-users of Bt maize seed in the Eastern Cape Province. Results of inferential analysis indicate that the statistically significant variables at 5% level are gene erosion, quality and nutrition of products and food labels for Bt maize products perceptions. On the other hand, low expenses, seed market availability and farmers’ knowledge perceptions were significant at 10%. These findings suggest that an adjustment in each one of the significant variables can significantly influence the probability of Bt maize adoption. In view of the research findings, several policy proposals are suggested to support policy formulation. Key words: Bacillus thuringiensis (Bt) maize, yieldgard, smallholder farmers, perceptions, Flagstaff, gross margin analysis, binomial logistic regression model, Eastern Cape Province.