In order to identify the drought tolerance and high yield germplasm of upland cotton, data of fifteen morphological and yield traits of 102 varieties with two treatments (drought stress and normal irrigation) were determined with direct evaluation and comprehensive identification methods in Dunhuang City, Gansu Province, where the annual rainfall is below 40 mm. Correlational analysis showed that seven indices that are less fluctuating between years should be selected in the comprehensive evaluation of drought tolerance of cotton, which include single boll weight, plant height, length between fruit branches and main stem, fruit branch number, effective boll number, yield per plant and stem dry weight. Comprehensive drought tolerance evaluation based on these indices are highly correlated and can be used to evaluate the drought tolerance of cotton varieties. When screening drought-tolerance and high-yielding performance of cotton germplasm, the influence of many factors should be considered comprehensively. On the basis of comprehensive evaluation of drought tolerance of the varieties, combined with the improved drought tolerance indices and drought tolerance coefficient calculated by the yield per plant of seed cotton, and by way of comprehensive analysis, drought-tolerant and high-yielding cotton varieties Jinken 1 Hao and Jinken 108 were screened out, and cotton varieties Zhong 21371, Brazil 012, Shiyuan 321, Jifeng 1056 and Xinluzao 33 Hao were identified as not being drought-tolerant high-yielding. The drought-tolerant high-yielding cotton varieties were stable in performance through the two-year test, are suitable for cultivation in the northwest inland cotton region, and can be used as standard varieties for drought tolerance identification.