The agriculture sector of Pakistan mainly depends on freshwater from groundwater resources. Deterioration of these resources adversely affected crop yields due to climate change and human activities. A comprehensive study was conducted to evaluate the groundwater quality of varying boring depths and the possible effects on the crop yield of cotton in Tehsil Fort Abbas, District Bahawalnagar, Punjab, Pakistan. A total of 347 samples were collected from the investigated areas. Results revealed that 86% of samples were declared unfit for irrigation purposes, 6% of samples were fit, and 8% of samples were marginally fit for irrigation. The ranges for the electrical conductivity (EC), sodium absorption ratio (SAR), and residual sodium carbonate (RSC) were 0.61–10.49 dS m−1, 0.65 to 5.44 meq L−1, and 0.02 to 5.44 meq L−1, respectively. Regarding the EC of water samples, the southwestern side of the study area where the lower values were observed was in an acceptable range in terms of water quality. Differential response to metal contamination was observed in the study area. Lower contamination of metals was observed in the water samples collected from some regions on the eastern and western sides of the study area. Principal component analysis (PCA) showed that by increasing the depth of the bore, the value of EC was also increased. Similarly, for the cotton lint yield maximum yield (1040 kg acre−1) was observed in the sampling point located in the southwestern part of the study area due to better quality of irrigation water, while the minimum cotton lint yield (520 kg acre−1) was noticed in sampling point located in the western side of the study area. Overall groundwater quality of Tehsil Fort Abbas was unfit for irrigation due to the high EC values and metal concentrations. The yield showed a negative correlation among all parameters of water. It was suggested that using the recommended dose of gypsum powder/stone and dilution of groundwater with canal water reduced the hazards of anions and cations of groundwater for the accumulation of salts in crops.