The introduction of Bt (Bacillus thuringiensis) cotton in India resulted in a significant decrease in the cultivation of tree/desi cotton. Despite this decline, there is a considerable demand for cotton with short staple lengths, particularly for surgical and denim purposes. Diploid cotton could serve as an alternative to G. hirsutum if given equal attention and slightly higher compensation. Gossypium arboreum, known as desi cotton or Tree cotton, is a native species in the Indian subcontinent and exhibits low input requirements, thriving in high salinity and drought conditions. Desi cotton’s resistance to sucking pests stems from features such as a greater separation between the midrib’s lower epidermis and the phloem, a lower palisade layer, and a dense arrangement of cortex cells in the midrib. By virtue of its tolerance to insect pests and diseases, G. arboreum is often chosen as a donor parent in introgressive breeding to enhance other cotton species. This chapter delves into various aspects, such as the genetic diversity of tree cotton (Gossypium arborerum), current cultivation practices, challenges faced by tree cotton, unique alleles within Gossypium arboreum for crop improvement, genetic diversity for adaptation against biotic and abiotic stress, conservation strategies to preserve genetic diversity in changing environmental conditions, fiber properties, market opportunities, recent advances in sequencing the Gossypium arboreum genome, plant regeneration using somatic embryogenesis, molecular marker-assisted breeding, and the role of genetic engineering and gene editing in conjunction with traditional and mutation breeding. Implementing goal-oriented breeding in desi cotton has the potential to increase yield while promoting sustainable livelihoods.