Optimizing soil health through soil amendments is a promising strategy for enhancing rainwater efficiency for stabilizing crop production. Biochar, obtained by torrefaction of sugarcane bagasse, a byproduct from sugar mills, has a high potential for its use as a soil amendment, which can boost crop yields, but needs further field trials for its adoption in farming systems. A field study was conducted during 2019–2021 at Stoneville, Mississippi, to assess rainfed cotton (Gossypium hirsutumL.) production under four biochar levels (0, 10, 20, and 40 t ha−1) on Dundee silt loam soil. The effects of biochar on cotton growth and lint yield and quality were examined. Biochar levels had no significant impact on cotton lint and seed yield for the first two years. Still, in the third year, a significant increase in lint yield by 13 and 21.7% was recorded at 20 and 40 t ha−1biochar levels, respectively. In the third year, lint yields were 1523, 1586, 1721, and 1854 kg ha−1at 0, 10, 20 and 40 t ha−1biochar levels, respectively. Similarly, cotton seed yield increased by 10.8% and 13.4% in 20 and 40 t ha−1biochar plots. This study demonstrated that successive biochar applications at 20 or 40 t ha−1can enhance cotton lint and seed yields under rainfed conditions. These improved yields with biochar did not produce increased net returns due to the increased production costs. Many lint quality parameters were unaffected except for micronaire, fiber strength and fiber length. However, potential long-term benefits of enhanced cotton production from biochar application beyond the length of the study merit further investigation. Additionally, biochar application is more relevant when accrued carbon credits through carbon sequestration outweigh the increased production costs due to biochar application.