A decrease in water resources, as well as changing environmental conditions, calls for efficient irrigation-water management in cotton-production systems. Cotton (Gossypium sp.) is an important cash crop in many countries, and it is used more than any other fiber in the world. With water shortages occurring more frequently nowadays, researchers have developed many approaches for irrigation-water management to optimize yield and water-use efficiency. This review covers different irrigation methods and their effects on cotton yield. The review first considers the cotton crop coefficient (Kc) and shows that the FAO-56 values are not appropriate for all regions, hence local Kc values need to be determined. Second, cotton water use and evapotranspiration are reviewed. Cotton is sensitive to limited water, especially during the flowering stage, and irrigation scheduling should match the crop evapotranspiration. Water use depends upon location, climatic conditions, and irrigation methods and regimes. Third, cotton water-use efficiency is reviewed, and it varies widely depending upon location, irrigation method, and cotton variety. Fourth, the effect of different irrigation methods on cotton yield and yield components is reviewed. Although yields and physiological measurements, such as photosynthetic rate, usually decrease with water stress for most crops, cotton has proven to be drought resistant and deficit irrigation can serve as an effective management practice. Fifth, the effect of plant density on cotton yield and yield components is reviewed. Yield is decreased at high and low plant populations, and an optimum population must be determined for each location. Finally, the timing of irrigation termination (IT) is reviewed. Early IT can conserve water but may not result in maximum yields, while late IT can induce yield losses due to increased damage from pests. Extra water applied with late IT may adversely affect the yield and its quality and eventually compromise the profitability of the cotton production system. The optimum time for IT needs to be determined for each geographic location. The review compiles water-management studies dealing with cotton production in different parts of the world, and it provides information for sustainable cotton production.