Changes in atmospheric CO₂ concentration strongly affect the photosynthetic performance of C₃ plants. Cotton (Gossypium hirsutum L.), a major global cash crop, provides a suitable model to study CO₂ fertilization effects. While moderate CO₂ enrichment can promote growth and yield, the optimal regime for field-scale application remains unclear. In this study conducted in Xinjiang, China, CO₂ gas was dissolved in irrigation water at four concentrations (0.04, 0.08, 0.12, 0.16 kg·m-³) and applied via a drip irrigation system. The effects on canopy CO₂ distribution, plant physiological responses, yield, and fibre quality were assessed. Drip-applied CO₂ solutions increased canopy CO₂ concentration by gradually releasing CO₂ from the soil, which in turn enhanced plant growth indicators (SPAD, AGB, LAI, plant height). Growth promotion followed a dose–response trend, with effects rising at lower concentrations and declining at higher levels. Yield analysis showed that lint yield increased by 1.9% and 8.4% under 0.04 and 0.08 kg·m-³ treatments, respectively, compared with the control (p < 0.05). In contrast, 0.12 and 0.16 kg·m-³ treatments reduced yield by 13.4% and 5.4%, respectively (p < 0.05). Fibre quality indicators remained within the optimal range across all treatments. Overall, 0.08 kg·m-³ was identified as the most effective concentration, producing the highest yield while maintaining fibre quality. These findings provide a scientific basis for the field application of CO₂-enriched irrigation, offering a promising approach to enhance cotton productivity and the ecological sustainability of farmland systems.