Cotton is a major cash crop of Pakistan that provides high foreign exchange and plays an important role in agriculture, industry, and economic development. The plant population is important in achieving high cotton yield and fiber quality attributes in irrigated conditions. Most farmers maintain plant spacing according to their local tradition, and often ignore the varietal characteristics in Pakistan that cause low yield and poor quality of products. Therefore, standardization of plant spacings according to varietal characteristics is important to achieve higher yield and fiber quality. A field experiment was carried out at the Agronomic Research Area, Muhammad Nawaz Shareef University of Agriculture, Multan, Pakistan in 2017, in order to evaluate the performance of four cotton cultivars (MNH-1016, FH-Lalazar, NIAB-878, and Cyto-124) under five plant spacings (15.0, 22.5, 30.0, 37.5, and 45.0 cm), comparing them with and without nitrogen application. Nitrogen fertilization was applied at the rate of 197 kg ha−1. The experiment was replicated thrice, as per Randomized Complete Block Design with factorial arrangements. The results showed that nitrogen application of 197 kg ha−1 showed a positive impact on all crop parameters compared to plots where no nitrogen fertilizer was applied. The wider plant spacing (45 cm) increased the values of many cotton parameters compared with other plant spacings (22.5, 30.0, 37.5 and 45.0 cm), but the seed cotton yield was found to be higher in the narrow plant spacing (15 cm). However, fiber quality parameters such as GOT, staple strength, and micronaire showed higher values under wider plant spacing (45.0 cm). The varieties showed a mixed effect on cotton productivity and fiber quality. The MNH-1016 significantly impacted yield-contributing parameters such as bolls plant−1, boll weight and seed cotton yield. The NIAB-878 showed a higher photosynthetic rate and stomatal conductance compared to other varieties. Therefore, the wider plant spacing with nitrogen application could be a better strategy to increase cotton growth, yield, physiology, and fiber quality. However, long-term studies under different climatic conditions are suggested for wider plant spacing with nitrogen fertilizers.