In arid and semi-arid regions, freshwater scarcity and high water salinity are serious and chronic problems for crop production and sustainable agriculture development. We conducted a field experiment to evaluate the effect of irrigation water salinity and nitrogen(N) application rate on soil salinity and cotton yield under drip irrigation during the 2011 and 2012 growing seasons. The experimental design was a 3×4 factorial with three irrigation water salinity levels(0.35, 4.61 and 8.04 dS/m) and four N application rates(0, 240, 360 and 480 kg N/hm2). Results showed that soil water content increased as the salinity of the irrigation water increased, but decreased as the N application rate increased. Soil salinity increased as the salinity of the irrigation water increased. Specifically, soil salinity measured in 1:5 soil:water extracts was 218% higher in the 4.61 dS/m treatment and 347% higher in the 8.04 dS/m treatment than in the 0.35 dS/m treatment. Nitrogen fertilizer application had relatively little effect on soil salinity, increasing salinity by only 3%–9% compared with the unfertilized treatment. Cotton biomass, cotton yield and evapotranspiration(ET) decreased significantly in both years as the salinity of irrigation water increased, and increased as the N application rate increased regardless of irrigation water salinity; however, the positive effects of N application were reduced when the salinity of the irrigation water was 8.04 dS/m. Water use efficiency(WUE) was significantly higher by 11% in the 0.35 dS/m treatment than in the 8.04 dS/m treatment. There was no significant difference in WUE between the 0.35 dS/m treatment and the 4.61 dS/m treatment. The WUE was also significantly affected by the N application rate. The WUE was highest in the 480 kg N/hm2 treatment, being 31% higher than that in the 0 kg N/hm2 treatment and 12% higher than that in the 240 kg N/hm2 treatment. There was no significant difference between the 360 and 480 kg N/hm2 treatments. The N use efficiency(NUE) was significantl