A study was conducted to determine the effects of arbuscular mycorrhizal (AM) fungi inoculation on growth of cotton grown under well watered and water stressed pot culture conditions. 15 days old cotton seedlings were planted in earthen pots after treatment with or without the AM fungi. Roots were sampled after 45, 90, and 135 days of growth stages to quantify AM fungi. Mycorrhizal colonization was higher in water-stressed plants than well-watered plants. Biomass was higher in mycorrhizal than non-mycorrhizal plants irrespective of water treatments. However the plants irrigated with alternate watering schedule had shown higher biomass and than those treated with daily watering. The improved growth in cotton plants reported here demonstrate the potential of mycorrhizal inoculation to reduce the effects of drought stress and useful for the better performance under stress conditions.