Due to the mismanagement of water and fertilizer application, cotton cultivation in Xinjiang Northwest China is faced with the problems of soil deterioration and groundwater table ascension. This study was conducted to evaluate the effects of different levels of water applied through drip irrigation on cotton yield and water use in an arid region of Northwest China. The experiment included five water treatments in which the soil matric potential (SMP) at a depth of 20 cm was controlled higher than -10 kPa (S1), -20 kPa (S2), -30 kPa (S3), -40 kPa (S4), and -50 kPa (S5) after cotton was established. The results revealed that the highest cotton evapotranspiration (ETc) was achieved under S1 (-10 kPa) treatment and the ETc, deep percolation and the ratio of deep percolation with irrigation water all increased with increasing SMP threshold. After three years experiment, no salt accumulation in surface soil layer was found under our irrigation schedule. The highest seed cotton yield was obtained when the SMP threshold was controlled above -30 kPa in 2008, and -20 kPa in 2009 and 2010. Moreover, the highest yield obtained after 3 years was 42% higher than the average yield achieved by local farmers in the area. Additionally, the water use value (WUE and IWUE) tended to increase as the SMP threshold decreased in 2009 and 2010. Considering the cotton yield and the impact of irrigation on the underground water table, an SMP higher than -20 kPa at 20 cm can be used as an indicator for cotton drip irrigation scheduling and agronomic practices in this area to help alleviate the dangerous increase in the water table while increasing the cotton seed yield. (C) 2012 Elsevier B.V. All rights reserved.