Tarim basin is the most suitable area to plant cotton in China. During the past decades, the basin has been developed into one of the major areas in China to yield high quality cotton due to its prominent conditions of sunshine and heat. Based on data of 1949-2007 from cotton industry, the spatio-temporal evolution of cotton industry and some problems produced in the process of cotton area extension are analyzed in detail by using the method of development index. Advices to further promote cotton industry are put forward. Several outcomes of this studying are as follows: (1) The cotton industry in Tarim basin has been developed remarkably from 1949 to 2007. The phases of cotton industry were divided into three parts: slow-paced development, then rapid growth, and finally steadily progress. The trend of cotton industry progress has some specific characteristics by itself as well as some similar characteristics to other areas. (2) In the process of cotton industry development, the range of predominant cotton area in Tarim basin has shrunk in west part, expanded eastward and outspread northward. What's more, the cotton area in each county extends greatly. (3) Some problems such as water resource shortage, eco-environment deterioration, weak response of market has come into being in the process of extension of cotton cropland. Several advices of optimum distribution, moderate scale, saving water irrigation, ecological cultivation, building consummated service system are put forward based on the above problems.