The present study is designed to determine the impact of Bt cotton seed on pesticide use and cotton productivity in the Punjab province of Pakistan. Cross-sectional data for two cropping seasons of 2008 and 2009 are gathered from three districts of cotton growing region of the province. Modified exponential damage control production function is employed to estimate the effect of Bt cotton seed. Results of the production function show that farmers using Bt cotton seed obtain higher yield as compared to non-users of Bt cotton seed. Fertilizer and irrigation variables are positively related with cotton yield whereas location dummies indicate that cotton growers from Multan district have low productivity as compared to those from Rahim Yar Khan and Mianwali districts. Age, farming experience and farm size are found increasing cotton productivity. So, the study concludes that in addition to traditional inputs and socioeconomic factors, Bt cotton can fetch higher benefits to cotton growers, provided that farmers have access to quality Bt cotton seed in the market.