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The finite-difference time-domain (FDTD) method has been widely used for the electromagnetic analysis of complex dispersive media. The shift-operator (SO)-FDTD or auxiliary differential equation (ADE)-FDTD formulation has been mainly employed for dusty plasma. Each FDTD formulation has its pros and cons. SO-FDTD is accurate but not computationally efficient. ADE-FDTD needs fewer computational resources, but its accuracy is poor. Here, we propose an accurate and efficient FDTD formulation for dusty plasma, based on the bilinear transform (BT). We perform a comprehensive study on the numerical permittivity and the computational efficiency for three FDTD formulations. Numerical examples are employed to illustrate that the proposed BT-FDTD outperforms the previously reported FDTD formulations for dusty plasma. In addition, based on the proposed BT-FDTD simulations, the effect of dust particles on EM wave propagation is investigated in the GHz band and the THz band. [ABSTRACT FROM AUTHOR]