The bZIP transcription factor (TF) act as an important regulator for the abscisic acid (ABA) mediated abiotic stresses signaling pathways in plants. Here, we reported the cloning and characterization of GhABF2, encoding for typical cotton bZIP TF. Overexpression of GhABF2 significantly improved drought and salt stress tolerance both in Arabidopsis and cotton. However, silencing of GhABF2 made transgenic cotton sensitive to PEG osmotic and salt stress. Expression of GhABF2 was induced by drought and ABA treatments but repressed by high salinity. Transcriptome analysis indicated that GhABF2 increases drought and salt tolerance by regulating genes related to ABA, drought and salt response. The proline contents, activity of superoxide dismutase (SOD) and catalase (CAT) were also significantly increased in GhABF2-overexpression cottons in comparison to wild type after drought and salt treatment. Further, an increase in fiber yield under drought and saline-alkali wetland exhibited the important role of GhABF2 in enhancing the drought and salt tolerance in transgenic lines. In conclusion, manipulation of GhABF2 by biotechnological tools could be a sustainable strategy to deploy drought and salt tolerance in cotton.