In agricultural ecosystems, drought has a detrimental effect on crop production, affecting the growth rate and development of the economically important traits of the crop plants. The presented study aimed to assess the genetic potential and aspects of 20 upland cotton cultivars (Gossypium hirsutum L.) for morpho-physiological and yield contributing traits under optimal and deficit irrigated conditions during 2018–2019, at Tashkent, Uzbekistan. With water deficit conditions, the proline content in plant leaves of various cotton genotypes increased (76.36%) compared with the optimal water regime. The chlorophyll a and b, total chlorophyll, and carotenoids can increase and decrease to varying degrees, depending upon the water content in the leaves of cotton genotypes. Results also revealed that upland cotton’s leaf relative water content, excised-leaf water loss, total chlorophyll, chlorophyll a and b, carotenoid and proline contents, plant height, sympodial branching, leaf area, bolls per plant, opened bolls plant, and seed cotton yield depended on water supply conditions and the genotypic composition of the genotypes. Based on the analysis of stress tolerance indices for morpho-yield and some physiological traits of cotton genotypes under different irrigation regimes, genotypes Namangan-77, Hapicala-19, 0-30, Zangi-Ota, Saenr Pena-85, S-2025, KK-602, SAD-35-11, and C-417 revealed tolerant to water deficit conditions. However, the cotton cultivars KK-1796, KK-1795, 1000, L-N1, S-9006, KK-1086, Catamarca 811, S-9008, L-N1, 141, C-4769, and L-45 were not good performers and susceptible to water stress conditions. Results concluded that soil drought conditions during the flowering stage disrupted physiological processes, including leaf relative water content and excised-leaf water loss.