Water is the most limiting input in irrigated cotton production. Compaction reduces access to the soil water resource and reduces soil health. Incorporating Controlled Traffic Farming (CTF) in 1.5 m row irrigated cotton improves water use efficiency (WUE). This investigation compared 1.0 m and 1.5 m row-spacing on cotton yield, fibre quality and WUE. The 1.5 m row-spacing cotton was hypothesised to have a similar gross margin and fibre characteristics but greater WUE and yield per plant through access to a larger soil water resource. This replicated study was conducted over two years (2013-14 and 2014-15) and had an RCB design with a field scale whole block experiment which contained nine replicates of 1.0 m and 1.5 m row treatments. The field scale whole block contained two large field blocks of 1.0 m and 1.5 m treatments. The 1.5 m cotton had a greater WUE by producing 0.09 more bales per ML. This reduced the irrigation requirement in the 1.5 m resulting in a higher gross margin than 1.0 m cotton ($2658/ha and $2466/ha, respectively). The 1m cotton out yielded the 1.5 m in both seasons by 1.8 bales/ha (16%) and 1.09 bales/ha (6%) respectively. Yield differences in the 1.0 m cotton were only achieved through an increase in inputs. Fibre quality was slightly better in 1.5 m cotton. The 1.5 m row-spacing, based on its capacity to improve WUE, is more suitable for water limited environments. Furthermore, CTF provides greater water use efficiency by minimising soil compaction.