AM fungi are helpful to enhance growth and productivity in BT cotton under salt and water stress conditions. Three genera and 33 species were isolated from rhizosphere soil of BT cotton. The genus Glomus was dominant with 19 species, nine species of Scutellospora and five species of Acaulospora were recorded from surveyed sites. Mycorrhizal plants produced more number of leaves than control plants,they were taller than control plants,the roots were also longer in mycorrhizal plants than control plants.The cotton bolls, picked bolls, weight of bolls and weight of seed cotton per boll of mycorrhizal BT cotton was much better than control plants. Plants treated with mycorrhizae protected plants from water and salt stress up to certain limit as compared to control plants. The AM fungi limited the increase in number of Verticillium dahliae propagules.