Abstract Increased levels of greenhouse gases in the atmosphere and associated climatic variability is primarily responsible for inducing heat waves, flooding and drought stress. Among these, water scarcity is a major limitation to crop productivity. Water stress can severely reduce crop yield and both the severity and duration of the stress are critical. Water availability is a key driver for sustainable cotton production and its limitations can adversely affect physiological and biochemical processes of plants, leading towards lint yield reduction. Adaptation of crop husbandry techniques suitable for cotton crop requires a sound understanding of environmental factors, influencing cotton lint yield and fiber quality. Various defense mechanisms e.g. maintenance of membrane stability, carbon fixation rate, hormone regulation, generation of antioxidants and induction of stress proteins have been found play a vital role in plant survival under moisture stress. Plant molecular breeding plays a functional role to ascertain superior genes for important traits and can offer breeder ready markers for developing ideotypes. This review highlights drought-induced damage to cotton plants at structural, physiological and molecular levels. It also discusses the opportunities for increasing drought tolerance in cotton either through modern gene editing technology like clustered regularly interspaced short palindromic repeat (CRISPR/Cas9), zinc finger nuclease, molecular breeding as well as through crop management, such as use of appropriate fertilization, growth regulator application and soil amendments.