It was demonstrated that varying irrigation deficits, if linked to measures of plant stress, will improve cotton yield and WUE. These benefits if adopted will impact on the 75% of Australia's irrigated cotton that is grown in a sub-humid climate with significant but variable in-crop rainfall and evaporative demand. When conditions were hot and dry during flowering, as in the 2006/7 season, frequent irrigation of Bollgard II cotton (40mm deficit) increased yield by 17% and WUE by 8% compared to the commonly used deficit (70-80mm) in the lower Namoi that season. In contrast, in 2007/8, where during flowering in-crop rainfall was greater and evaporative demand lower, stretching irrigation during flowering (54 to 78mm deficits) maximised yield, WUE and captured more in-crop rainfall than irrigating at a 40mm deficit. However, irrigation application efficiency tradeoffs are farm specific and need to be measured before adopting small deficits.Improved scheduling of Bollgard II in water limited situations has been largely achieved with the contribution of the research conducted in this project. The need to avoid water stress late in flowering in Bollgard II was confirmed as yield losses per day of stress were double the conventional variety at the same growth stage. This message has been widely extended over the past three years.The question of which has the higher WUE, conventional or Bollgard II varieties, has been answered by showing that it depends on the impact that Helicoverpa damage has on crop morphology. In a situations where insect damage was moderate Bollgard II used less water than the conventional variety because the conventional variety grew for longer to compensate for the damage. Where insect damage is minimal there is no difference because the plants are morphologically identical. However the situation where early tipping of the main-stem was the only insect damage to the conventional variety, it had the highest yield and WUE due to the improved canopy structureThe irrigation water requirement of cotton in pressurised systems (e.g. tape) was sensitive to climatic conditions and could be reduced provided the crop factor is varied in response to plant growth and climate. Cotton grew differently in this system compared to furrow irrigation.OZCOT model enhancement is need if it is to effectively simulate climatic risk in new production regions or changed cropping practices or the simulation of water balances or climate change scenarios.This project produced data to show: 1) replication is essential for paddock size water balance trials and experiments; 2) a review of plant monitoring methods for early irrigation scheduling is required; 3) new research methodologies developed here will provide indirect benefits to the cotton industry.