The Arabidopsis gene AVP1 encodes a vacuolar pyrophosphatase that functions as a proton pump on vacuolar membrane. Overexpression of AVP1 could increase proton electrochemical gradient in vacuole, thereby activating vacuolar membrane-antiporters including Na⁺/H⁺ antiporter, which helps in sequestration of Na⁺ into the vacuole. In addition, overexpression of AVP1 increases auxin transport and enhances auxin mediated root development, consequently achieving higher water absorption and retention capacities. We have generated AVP1-expressing cotton plants and tested their performance. Under 200 mM NaCl, AVP1-expressing cotton plants performed better than wild type plants and the increased salt tolerance is positively correlated with the AVP1 transcript. Under periodic drought stress treatment, AVP1-expressing plants are significantly more tolerant than wild type plants. Furthermore, our small scale greenhouse experiments showed that AVP1-expressing plants produced bigger bolls than wild type cotton under drought conditions, which suggests a great potential of this approach in increasing cotton fiber’s yield in the semi-arid land of America’s Southwest. Most recent data on the performance of the AVP1-expressing cotton plants under stress conditions will be presented at the meeting.