Abstract Stomatal conductance and transpiration were measured on normally‐irrigated (NI) and water‐stressed (WS) field‐grown cotton ( Gossypium hirsutum L.) exposed throughout the growing season to a gradient of ozone (O 3 ) concentrations. Environmental conditions during the growing season strongly affected stomatal responses and yield reductions due to O 3 exposure. Maximum stomatal conductance and transpiration decreased with increased O 3 concentration both in NI and WS treatments. Maximum conductance in severely O 3 ‐stressed plants averaged 30% lower than charcoal‐filtered (control) plants, but maximum transpiration was only 17% lower. Conductance in WS plots averaged 22% lower than in NI plots but transpiration rates were the same in both treatments. Yield reductions induced by O 3 were highly correlated ( r 2 = 0.84) with daily transpiration. Stomata of O 3 ‐stressed plants opened and closed at the same rate as control plants in response to changes in light intensity, suggesting that the mechanism of stomatal movement had not been impaired by exposure to O 3 . Reductions in conductance and transpiration in O 3 ‐stressed plants were attributed to inhibition of photosynthesis by O 3 , leading to accumulation of CO 2 in intercellular spaces.