Abstract Background Nitrogen (N) is a required macronutrient for cotton growth and productivity. Excessive N fertilizers are applied in agriculture for crop yield maximization, which also generates environmental pollution. Improving crop N use efficiency (NUE) is the most economical and desirable way of reducing fertilizer application and environmental pollution. NUE has been an important issue in cotton. So far there is no report on cotton NUE improvement via transgenic approach. Nin-like proteins (NLP) are transcription factors regulating NUE. We previously demonstrated that AtNLP7 improved NUE and biomass when overexpressed in Arabidopsis. However, it is not known whether AtNLP7 can be used to improve NUE in crops. Results To test the feasibility, we expressed AtNLP7 in cotton and evaluated NUE and yield of the transgenic cotton in the field. Transgenic cotton showed improved NUE and yield under both low and high N conditions. In addition, plant biomass, amount of absorbed N, N contents, activities of N-assimilating enzymes, and the expression of N-related marker genes were significantly increased in transgenic cotton compared with the wild type control, suggesting that AtNLP7 enhances NUE in cotton. Conclusion Together, our results demonstrate that AtNLP7 is a promising candidate to improve NUE and yield in cotton.