The effects of varying degrees of water stress on stomatal activity, photosynthesis, and nitrate reductase activity were examined in field grown cotton (Gossyplum hirsutum L., cv ‘Dunn 56C’). A relationship between plant water status and activity of each measured physiological parameter was established.Slight increases in leaf diffusive resistance were observed as leaf water potentials decreased although complete stomatal closure due to water stress was not generally observed. In many cases, visibly wilted leaves with zero turgor potentials exhibited minimal diffusive resistances. Morning and afternoon values of leaf diffusive resistance were distinctly different even though no correlation between leaf water potential and diffusive resistance was evident.Water stress substantially reduced photosynthesis in both vegetative and reproductive leaves of cotton. Photosynthetic rates of each leaf type responded differently to declining leaf water potentials. The data suggest that the photosynthetic reduction could not be attributed to stomatal closure.The activity of nitrate reductase was adversely affected by declining leaf water potentials. The nocturnal activity of nitrate reductase (respiratory linked) was also reduced by severe water stress. However, the reduction from maximum daily activity to minimum night time activity was similar in both stressed and non‐stressed plants. These data suggest that inhibition of nitrate reductase activity could be due to long term water stress effects rather than temporal changes in plant water status.The data presented indicate that stomata of field grown cotton are relatively insensitive to water stress, at least within the range of leaf water potentials observed in this study. Measurement of stomatal activity may not be a good criterion for assessing plant water status of cotton. The measurement of one or more physiological processes may prove a better index of plant water status as well as providing sensitive selection criteria for breeding more drought tolerant varieties.