New cultivars, improved management and their interactions are key drivers of yield progress in field crops. This study examined the contribution of these factors to cotton yield increase in Australia with the adoption of 23 key locally bred cultivars developed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) cotton breeding programme up to 2006. A lint yield dataset of advanced line trials from 1980 to 2009 (325 experiments) was analysed by a linear mixed model when split into two 15-year periods. These trials were conducted at up to 15 irrigated sites each year, and best linear unbiased estimates (BLUEs) of cultivar yield and two long-term controls (Deltapine 16 and Namcala) were used to assess yield trend. Lint yield increased progressively as new cultivars were released and yield gain was almost three times as high in the recent 15-year period as the early one (18.3 versus 7.0kgha-1year-1). This gain tended to be greater in cooler than warmer regions, despite lower yield in the cool. The most recent cultivars also showed improved stability. When pairs of cultivars derived from intra-cultivar selection were compared, reselected ones outyielded their parents and with higher stability. The increased cultivar yield and the reduction of genotype×region and genotype×year interaction were the main reasons behind the ongoing improved yield and stability of these released cultivars. Using yield estimates of 10 cultivars tested in both time periods, yield gain was found to be attributed by cultivar, i.e. genetics (48%), management (28%) and cultivar×management (24%). There was evidence for cultivar resistance to Verticillium wilt being a strong component of the cultivar×management interaction. It was concluded that cotton yield progress in Australia was achieved mostly through exploiting genetic variation and genotypic response to modern management.