The limited water supply for irrigation is a major constraint to cotton production. Morphological and physiological traits provide useful information for drought tolerance. This research work was carried out for the identification of cotton genotypes having better drought tolerance. For this purpose, forty (40) genotypes of upland cotton were studied under two moisture regime, i.e. normal and drought environment in field conditions. The experiment was conducted using split plot design under RCBD arrangement. All the genotypes behaved differently under two moisture levels. The interaction of cotton genotypes with two moisture levels were studied for various traits, i.e. plant height, sympodial branches, seed cotton yield, boll weight, number of bolls per plant, excised leaf water loss and relative water content by using Principle Component Analysis (PCA). Results showed that the genotypes VH-144, IUB-212, MNH-886, VH-295, IR-3701, AA-802, NIAB-111, NS-121, FH-113, and FH-142 are either stable or showing positive interaction with drought conditions for most of the traits under studied. These genotypes can be used in further breeding program for developing varieties suitable for cultivation under drought conditions, whereas; IR-3, CIM-443, FH-1000, MNH-147, S-12 interacted undesirably with drought stress