Fertilization and plant density are key factors in cotton yield, especially under conditions of water shortage. We conducted a two year- field experiment to investigate the nitrogen × PSB bacteria synergic effect on photosynthesis and water relation of cotton under water stress conditions and different plant densities. The experimental design was a 25 factorial with five factors I: Irrigation (moderate and restricted irrigation), N: Nitrogen (with and without nitrogen), D: Plant density (low and high plant density), B: phosphate solubilizing bacteria (PSB bacteria) (with and without incubation), P: Phosphorus (with and without phosphorus). Results revealed that the ratio (Fv/Fm) did not respond to restricted irrigation when N and B were consumed together, and one of these factors was also enough to prevent the decline in the relative water content (RWC) under IR conditions. P had a reducing effect on RWC under IR conditions, and its role in preventing LAI loss under restricted irrigation condition did not result in the improvement of yield (GLY). IR reduced RWC and GLY in low density plots without nitrogen consumption but using N or higher plant density was enough to prevent this decline. The results conclude that P can be replaced with B under IR conditions, and the synergic interaction of N×B can strongly reduce the effect of drought stress on cotton yield in high plant density.