Water deficit is considered one of the most important factors affecting on cotton yield. The purpose of this study was to assess genotypic variation for water deficit stress in a set of cotton germplasm using geometric mean yield (GMY) and drought suscepatability index (DSI) as a selection criteria and to determine genotype x environment interaction influences on cotton yield. Seven lines and five testers were crossed at Sakha in 2010 growing season. The parents and their 35 crosses were evaluated in two locations Sakha and Elnobaria in growing season 2011  under well waterd (W1) and water limited (W2) regimes in each location. Water stress detrmined by the drought intensity index which was similar in the two locations (0.34 in Elnobaria and 0.32 in sakha).Genotypic variation was detected in the both locations  and substintial variation in GMY ranged from 92.3 to 156.2 g and 54.5 to 135.1 g for Sakha and Elnobaria, respectively. Significant negative correlation of DSI with seed cotton yield, lint cotton yield, boll weight, seed index and harvest index in the two locations. AMMI analysis showed that interaction principle component (IPCI) effects, and (IPC2) have justified 61.87 and 21.05% of the total variations related to genotypes interactions in the environments, respectively. Among all the environments, Elnobaria under well waterd (NW1) has been categorized as highly interactive environments, because it exhibited high positive interaction (IPC1 score) effect.