Genetically modified (GM) cotton was developed to reduce the heavy reliance on pesticides. Genetically modified cotton is widely used throughout the world with claims of requiring up to 80% less Pesticide than ordinary cotton as typically grown commercially. However, researchers have recently published the first documented case of in-field pest resistance to GM cotton. The International Service for the Acquisition of Agri-Biotech Applications (page does not exist) (ISAAA) said that, worldwide, GM cotton was planted on an area of 67,000 km² in 2002. This is 20% of the worldwide total area planted in cotton. The U.S. cotton crop was 73% GM in 2003.

The initial introduction of GM cotton proved to be a commercial and ecological disaster in Australia - the yields were far lower than predicted, and the cotton plants were cross-pollinated with other varieties of cotton. However, the introduction of a second variety of GM cotton led to 15% of Australian cotton being GM in 2003. 80% of the crop was genetically modified in 2004, when the original GM variety was banned.

GM cotton acreage in India continues to grow at a rapid rate increasing from 50,000 hectares in 2002 to 3.8 million hectares in 2006. The total cotton area in India is about 9.0 million hectares (the largest in the world or, about 25% of world cotton area) so GM cotton is now grown on 42% of the cotton area. This makes India the country with the largest area of GM cotton in the world, surpassing China (3.5 million hectares in 2006). The major reasons for this increase is a combination of increased farm income ($225/ha) and a reduction in pesticide use to control the Cotton Bollworm.

Cotton has Gossypol, a toxin that makes it inedible. However, scientists have silenced the gene that produces the toxin, making in a potential food crop.