This study is to test the effects of Bt gene introduction on the foliar water/nitrogen use efficiency in cotton. We measured leaf stomatal conductance, photosynthetic rate, and transpiration rate under light saturation condition at different stages of a conventional cultivar (zhongmian no. 16) and its counterpart Bt cultivar (zhongmian no. 30) that were cultured on three levels of fertilization, based on which leaf instantaneous water use efficiency was derived. Leaf nitrogen concentration was measured to calculate leaf photosynthetic nitrogen use efficiency, and leaf δ¹³C was used to characterize long term water use efficiency. Bt cultivar was found to have lower stomatal conductance, net photosynthetic rates and transpiration rates, but higher instantaneous and long time water use efficiency. In addition, foliar nitrogen concentration was found to be higher but net photosynthetic rate was lower in the mature leaves of Bt cultivar, which led to lower photosynthetic nitrogen use efficiency. This might result from the significant decrease of photosynthetic rate due to the decrease of stomatal conductance. In conclusion, our findings show that the introduction of Bt gene should significantly increase foliar water use efficiency but decrease leaf nitrogen use efficiency in cotton under no selective pressure.