Potassium (K) plays a major role in the basic functions of plant growth and development. In addition, K is also involved in numerous physiological functions related to plant health and resistance to biotic and abiotic stress. However, K deficiency occurs widely resulting in poor growth, lost yield, and reduced fiber quality. This review describes the physiological functions of K and its role in stress relief and also provides some agronomic aspects of K requirements, diagnosis of soil and plant K status, and amelioration. The physiological processes described include enzymes and the regulation of organic-compound synthesis, water relations and stomates, photosynthesis, transport, cell signaling, and plant response to drought stress, cold stress, salt stress, as well as biotic stresses. The agronomic aspects of K fertilization include the K requirements of cotton, K uptake, and soil characteristics, genotypic variation in K uptake and use, and characteristics of K deficiency in cotton. In addition, diagnosis and amelioration of K soil and plant status is discussed.