The commercial potential of genetically engineered (GE) crops has not been fully realized in the United States. Over the past decade, environmental litigation dramatically affected the pace of GE crop development, testing, and deregulation. The U.S. Animal and Plant Health Inspection Service (APHIS) regulates GE organisms that may pose a risk to plant or animal health. However, recent litigation initiated by nongovernmental organizations such as the Center for Food Safety and the International Center for Technology Assessment has exposed APHIS's vulnerability to lawsuits under the National Environmental Policy Act (NEPA) for failing to assess the environmental risks of novel GE crops. In these cases, APHIS committed two types of mistakes. First, APHIS did not differentiate between traditional GE crops whose risks are well characterized and novel GE crops that may raise unique environmental risks and societal issues based on their distinctive biology. Consequently, it did not adequately evaluate the legally defined environmental risks of these novel crops. Second, APHIS did not fully appreciate NEPA's sweeping scope and focus on procedural compliance to ensure transparent and thorough environmental decision making. As a result, APHIS impeded the development and commercialization of GE crops and must take a more defensive posture in the future to deter costly and lengthy NEPA litigation in the case of novel GE crops.