Cotton is one of the most important economic crops and the fiber produced is the raw material for the textile industry. Drought affects cotton productivity and fibre growth, resulting in poor quality of fibre. It is essential to experiment and study the response of cotton varieties to changing water deficit scenarios. Present investigation was conducted in the Rain out shelter (ROS) and the varieties taken are compact Cotton Co 17 and a check variety KC3 (Kovilpatti Cotton 3). Drought stress (55% moisture reduction from control (T₁)) was imposed on squaring (T₂) and flowering stages (T₃) of cotton varieties. Results showed that the percentage reduction was higher in growth traits and nutrients in Co 17 (N: 16 %, P: 35%, K: 22%) than KC3 (N: 10%, P: 17%, K: 16%) under flowering stress. Under drought stress, varieties showed earlier flowering phase. Drought stress reduced the yield by 37% in Co 17 and 22% in KC3.