In the face of increasing international and man-made fiber competitions, improved quality of cotton for the global marketplace has become a major challenge for the U.S. cotton industry. To meet the worldwide end-use market demand for superior fiber, American cotton breeders, growers, and merchants are striving to improve fiber quality to maintain and expand the U.S. competitive position. The significance of improved cotton fiber quality induced by new genetic and spinning technologies has not been evaluated with respect to the global market demand and its impacts on the quality premiums and discounts, market price and economic benefits to the industry. A comprehensive analysis of U.S. cotton quality improvement in the past decade and projection for the future was performed by using a simultaneous system of quality/quantity choice model. Simulation analyses indicate that cotton quality has a significant positive impact on the demand and prices, especially export demand. Rapid biotechnology developments are expected to stimulate growth of better fiber quality and enhance economic returns to the cotton industry. Continuation of cotton quality improvement is needed to maintain and increase U.S. cotton's market share in world trade.