Development of cotton varieties having good performance for salt-affected soils is one of the prime objectives of the cotton breeding institutions across the country. Thus, the present research work was carried out to find information about the presence of sufficient variability in cotton germplasm at seedling stage as well as at full crop stage. Considering the importance of evolution of salt tolerant varieties, the present study was planned with objectives: (a) to screen out available of cotton germplasm to determining their salt tolerance potential, (b) to Check out the genetical behaviour of F1 cotton genotypes under salt stress, and (c) To find out F1 cotton genotypes having high yield potential than existing cultivars. The cotton germplasm comprising of 50 genotypes was exposed to salinity stress of NaCl @10 and 20 dSm-1 at seedling stage. Large variations were exhibited by all the genotypes for root and shoot length, root and shoot fresh and dry weights. Moderate to high coefficient of variance and high heritability coupled with high genetic advance reflected that improvement in salinity tolerance at seedling stage is possible through selection. Selection index and cluster analysis resulted in 6 tolerant genotypes (NIAB-999, CIM-707, NIAB-78, MNH-93, CIM-446 and CIM-443) and 3 susceptible genotypes (CIM-499, NIAB-111 and S- 12). The line×tester mating design (using 6 tolerant genotypes as lines and 3 susceptible genotypes as tester) was employed to study the inheritance pattern of yield contributing traits (plant height, number of bolls per plant, individual boll weight and seed-cotton yield), fibre quality traits (GOT%, staple length, staple strength, fiber fineness) and ionic concentration traits (Na+, K+ and K+/Na+ ratio) of cotton genotypes exposed to normal (control level) and salinity stress level of NaCl @ 20 dSm-1. Analysis of variance indicated huge variation for all traits studied and it was found that salinity caused severe reduction in all traits except in Na+ and GOT%. High heritability estimated along with moderate to high values of genetic advance for all yield contributing traits suggested that selection may result in considerable improvement of seed-cotton yield under salinity stress. Plant height, number of bolls per plant, individual boll weight GOT%, staple length, staple strength, K+ and K+/Na+ ratio under salinity stress had shown highly significant correlation with seed-cotton yield per plant. Highest direct effects on seed-cotton yield were exhibited by number of bolls per plant and individual boll weight. Additive gene action was exhibited by plant height and number of bolls per plant, Na+, K+ and K+/Na+ ratio under salt stress environment while for individual boll weight, seed-cotton yield and staple length, mixed trend of additive and non-additive gene action were found under salt stress. It was also found that salt tolerant genotypes showed relatively less uptake of Na+ but high uptake of K+ and K+/Na+ ratio under salinity stress. The hybrids NIAB-999× CIM-499 and CIM-707× CIM-499 (on the basis of heterosis and combining ability estimates) were the top 2 hybrids having superior yield and increased salt tolerance under salt stress environment. Combining ability analysis suggested that these above 2 F1 genotypes need to be further progressed through pedigree method of selection.