Water stress can trigger acclimation responses and damage plants. The aim of this study was to evaluate the integrative responses of cotton hydraulic conductance, leaf photosynthesis, and carbon metabolism to short-term drought and subsequent rewatering. A water-controlled pot experiment was conducted in 2020, with soil water drying continuing for one day (D1), two days (D2), and three days (D3) after it reached 40% ± 5% of the soil water holding capacity at the blooming stage of cotton, and the soil was then rewatered to the soil water holding capacity. We investigated how the stem hydraulic conductance, gas exchange, and biochemical traits of cotton were affected by imposed drought stress and subsequent rewatering. The hydraulic characteristics of cotton in the D2 and D3 treatments evolved with damage, complete closure of stomatal conductance, and complete deterioration of photosynthesis, in addition to severe floating changes in the carbon metabolism affected by drought. The leaves’ functional characteristics after rewatering cannot be completely recovered to full-irrigation levels, and the recovery extent was strongly linked to the duration. Consequently, it is considered desirable to maintain normal physiological activity during the cotton reproductive period, and the drought episode can be sustained for 1 day in a long-term perspective when the soil water content is depleted to 40% ± 5% of the soil water holding capacity. These results can provide in-depth ideas for better understanding the hydraulic and physiological responses of cotton to drought episodes and rewatering, and they can help drought-affected cotton to cope with future climate change.