Since last few decades there is a resurgence of interest in naturally coloured cotton. This has motivated the cotton breeders to develop eco-friendly naturally coloured cotton varieties. To support such endeavours a study was carried out to characterize some coloured and white cotton genotypes using morphological and molecular markers, study the transcript level of different flavonoids structural genes in brown green and white cotton fibres, find out differences in the fibre structure and obtain information on the inheritance of fibre colour, yield, and quality traits. The scatter plot analysis grouped 20 cotton genotypes into four clusters. White cotton genotypes, except Cute-98 grouped in Cluster I. The Clusters II and III had all the tetraploid coloured cotton genotypes while Cluster IV had two diploid cotton genotypes. Biplot analysis also showed negative association between fibre colour and fibre quality traits. Both SSR and EST-SSR markers revealed high level of genetic similarity among the cotton genotypes. Two separate dendrograms based on SSR and EST-SSR markers identified four main clusters for 20 cotton genotypes. Nineteen SSR and five EST-SSR markers were found to be associated with different fibre quality traits. Higher value of expected heterozygosity, effective multiplex ratio and marker index for SSR markers as compared to EST-SSR markers showed distinctive nature of SSR markers in revealing the difference among cotton genotypes. Transcriptome analysis of five flavonoid structural genes i.e., GhCHI, GhF3H, GhDFR, GhANS and GhANR revealed temporal expression of these genes during different fibre developmental stages in brown, green and white cotton fibres. The transcript level of all genes was significantly higher in brown then green and white cotton fibres. Scanning electron microscopic analysis at 500X magnification revealed significant improvement in morphological features of fibre of all coloured hybrids as compared to their parents. The surface structure of brown cotton fibres had rough appearance under SEM (4000X) than the other parental lines and coloured cotton hybrids. The additive, dominance and epistatic genetic effects appeared to be involved in the inheritance of various plant traits. Additive type of gene action was involved in the inheritance of boll weight, seed volume and fibre fineness in all crosses. Moderate estimates of narrow sense heritability for these traits confirmed the preponderance of additive gene effects in the inheritance of these traits. Chi-square analysis revealed that single incomplete dominant gene was responsible for the inheritance of fibre colour in naturally coloured cotton. In conclusion, the information on the extent of genetic diversity in cotton germplasm and association of molecular markers with fibre quality traits would be helpful in constructing the breeding populations with desired allelic combinations. The transcriptome analysis of flavonoids structural genes demonstrated that gene manipulation strategy to modulate the transcript level of these genes could improve the pigmentation of brown cotton fibres. Scanning electron microscopy of fibre structure appeared effective in identifying structural difference of fibres in coloured cotton. The comprehensive information on the genetic diversity, fibre structure and gene expression together with the estimates of phenotypic components of genetic variation, obtained from six breeding generation, provided convincing basis for the genetic improvement of coloured cotton cultivars.