The potential for breeding Gossypium hirsulum L. for drought stress tolerance was investigated in the present studies. For this purpose, a sample of 40 cotton varieties/lines was screened in greenhouse as well as in field condition. In glasshouse, drought stress was applied at 50%, 75% and 100% field capacity. The performance of theses genotypes was compared using data on shoot length, root length, shoot fresh weight, root fresh weight, shoot dry weight, root dry weight, relative water content and excised leaf water loss through biplot analysis. In field condition, genotypes were screened in two irrigation regimes (normal and drought stress). Drought tolerance indices i.e. stress tolerance index, stress susceptible index, mean productivity, relative decrease in yield index, yield stability index, yield index were calculated on the basis of seed cotton yield. Ten highly drought tolerant (VH-144, IUB-212, MNH-886, VH-295, IR-3701, AA-802, NIAB-111, NS-121, FH-113, FH-142) and five drought sensitive (IR-3, CIM-443, FH-1000, MNH-147, S-12) genotypes/cultivars were selected on the basis of biplot analysis. In order to make F1 crosses in the glasshouse, drought tolerant genotypes were kept as lines and drought sensitive genotypes as testers by using line × tester mating design. Genetic material was field planted under two irrigation regimes (normal and drought stress). At maturity data was recorded for plant height, number of monopodial branches, number of sympodial branches, number of bolls per plant, boll weight, seed cotton yield, seed index, lint percentage (GOT %), fiber length, fiber strength, fiber fineness and fiber uniformity. The analysis of F1 and parental data revealed that there were preponderance of non-additive gene action for all the traits under normal and drought condition. The line VH-295 was a good general combiner followed by FH-142 among the traits. Among testers, CIM-443 appeared to be good general combiner for most of the traits. Comparison of crosses showed that FH-142 × IR-3 was the best combinations for plant height, boll weightseed cotton yield, yield index and relative drought index. The cross combinations NS-121 × CIM-443 and IUB-212 × CIM-443 exhibited good mid parent and better parent heterosis for seed cotton yield related traits under normal and drought conditions. The cross VH-144 × MNH-147 showed good mid parent heterosis for fiber length and fiber strength while the cross FH-113 × IR-3 showed good better parent heterosis for fiber strength and fiber fineness under normal and drought conditions. The cross combination IUB-212 × CIM-443 exhibited good mid parent and better parent heterosis effect for most of drought tolerance indices. The lines × testers’ interaction contributed more to expression of most of traits under normal and drought condition except fiber uniformity for tester under normal and drought condition and GOT% for tester under normal condition. The crosses VH-144 × S-12, FH-142 × IR-3 and NIAB-111 × IR-3 can be used in variety development program for drought pruned areas of Pakistan with high specific combining ability for most of traits under drought condition. Non additive gene action for most of traits suggests the possibility of using this material in the hybrid development programme in cotton.