A field experiment was carried out during kharif 2006-2007, 2007-2008 and 2008-2009 at Agricultural Research Station, Siruguppa to study the response of Bt cotton to spacing and fertilizer levels under irrigated ecosystem. The results revealed that among the spacings, closer spacing of 90*45 cm produced significantly superior seed cotton yield (2243 kg/ha) over wider spacing of 90*90 cm (1867 kg/ha) and it was at par with 90*60 cm (2121 kg/ha). Among the fertilizer levels, application of 125 per cent NPK registered higher seed cotton yield over 75 per cent NPK but at par with application of 100 per cent NPK. On the contrary the ancillary data indicated that, higher seed cotton yield/plant (136.11 g/pl) and more bolls (40.46/pl) were observed in wider row spacing of 90*90 cm as compared to other spacings. In case of fertilizer levels more seed cotton yield/plant was observed in application of 125 per cent NPK (130.40 g/pl) as compared to 75 and 100 per cent fertilizer levels. Similar trend in bolls/plant, sympodia and boll weight were found as that of yield. Further, higher gross return (Rs.56774/ha), net returns (Rs.30837/ha) and B:C ratio (2.20) was recorded in closer spacing of 90*45 cm as compared to 90*90 cm. Among the fertilizer levels, application of 125 per cent RDF recorded maximum gross return (Rs.55256/ha), net returns (Rs.29415/ha) and B:C Ratio (2.15) which was significantly superior to 75 per cent NPK but at par with 100 per cent NPK. From the results, it can be concluded that, Bt cotton responds to closer spacing of 90*45 cm with the application of 100 per cent NPK for realizing higher yield and monetary advantages.