The consumption of a cotton product is connected to a chain of impacts on the water resources in the countries where cotton is grown and processed. The aim of this paper is to assess the ‘water footprint’ of worldwide cotton consumption, identifying both the location and the character of the impacts. The study distinguishes between three types of impact: evaporation of infiltrated rainwater for cotton growth (green water use), withdrawal of ground- or surface water for irrigation or processing (blue water use) and water pollution during growth or processing. The latter impact is quantified in terms of the dilution volume necessary to assimilate the pollution. For the period 1997–2001 the study shows that the worldwide consumption of cotton products requires 256 Gm3 of water per year, out of which about 42% is blue water, 39% green water and 19% dilution water. Impacts are typically cross-border. About 84% of the water footprint of cotton consumption in the EU25 region is located outside Europe, with major impacts particularly in India and Uzbekistan. Given the general lack of proper water pricing mechanisms or other ways of transmitting production-information, cotton consumers have little incentive to take responsibility for the impacts on remote water systems.