Drip irrigation and computer simulation growth models are potential tools for improving water and N-application strategies to cotton (Gossypium hirsutum L.) in the southeastern USA. Our objectives were to determine the effect of subsurface-drip lateral spacing on plant water status and determine the effect of crop rotation, lateral spacing, and N-application method on plant N status. Soil type was Eunola loamy sand (fine-loamy, siliceous, thermic Aquic Hapludult), and the experiment was conducted from 1991 through 1994. Treatments were rotation [continuous cotton vs. cotton rotated with peanut (Arachis hypogaea L.)], water management [laterals buried 0.3 m below each row (1-m spacing), laterals buried 0.3 m deep in alternate mid-rows (2-m spacing), or none (rainfed)], and sidedress-N scheduling application method [112 kg N ha-1 at one time (standard), five weekly applications of 22.4 kg N ha-1 (incremental), or 11.2 or 22.4 kg N ha-1 applied when the GOSSYM-COMAX simulation model output predicted N stress]. The N application treatments were applied at or shortly after first square each year. The total amount of N applied for the GOSSYM-COMAX treatment was 67 kg ha-1 each year. On cloudless days, leaf water potential was measured in all three irrigation treatments of the continuous cotton receiving the standard N application. Leaf petiole NO3–N and leaf blade N were determined weekly in all treatment combinations. Leaf water potentials did not differ between the 1-m and the 2-m lateral spacing in any year. Rainfed cotton had water potentials as much as 0.49 MPa lower than irrigated cotton. At early sampling dates in 2 of the 4 years of the study, leaf petiole NO3–N was lower for cotton grown with the 2-m lateral spacing than for the cotton grown with the laterals spaced 1 m apart. Cotton in the 2-m lateral spacing treatment had lower leaf blade N content at early sampling dates in 3 years of the study. In 1994, the GOSSYM-COMAX method generally had lower leaf N concentrations than the other two N application methods. The results suggest that a lateral spacing wider than 1-m placement is adequate for supplying both water and N to cotton on these soils and that N management can be improved by using simulation models for predicting N-fertilizer needs.