THE SUCCESS of cotton breeding programme depends upon the available information about genetic potential of various genotypes, genetic variability, and heritability. While, selection reduce variability in the next generation by increasing phenotypic mean performance. The maximum and minimum range in F2 was observed to be wider than in F3 generation. While, the phenotypic mean performance of F3 was higher than F2 for all traits. Analysis of variance revealed highly significant (P≤ 0.01) differences between F3families which revealed greater genetic variation between these families. The excepted genetic variance of F3 families was larger than environmental variance and average variance within F3 families. Also, the intra-class correlation was more than 0.95%. These results indicated that the variability between families was larger than within families and selection between families could be more efficient than within families. The additive genetic variance plays a major role in controlling all the studied traits among two cotton crosses and had partial degree of dominance. Selection differential and response to selection were found to be positive for all traits, except micronaire value among two cotton crosses. Cross II has higher prediction of new recombinant falling outside parental range and exceeding F1 hybrid than cross I for most studied traits. The study reveals that judicious selection leads to improve mean performance in next generation. The most promising families should evaluate in multilocations yield trials.