Step 1: Understanding Bt cotton.
Bt cotton is a genetically modified organism that produces its own insecticide. The modification involves inserting a gene from the bacterium Bacillus thuringiensis (Bt).
Step 2: Correct answer analysis.
Bt cotton is formed from the bacteria Bacillus thuringiensis, which helps the plant defend against pests.
Final Answer:
\[
\boxed{(C) \; Bacteria}
\]