Verticillium wilt of cotton is a widespread and destructive disease that is caused by the fungus pathogen Verticillium dahliae. Although no cotton cultivar is immune to the disease, some genotypes exhibit superior wilt tolerance. To gain an insight into the molecular mechanisms responsible for wilt tolerance, we employed the method of suppression subtractive hybridization (SSH) to isolate genes whose expression is up-regulated after inoculation of the pathogen in a wilt-tolerant cotton cultivar (Gossypium hirsutum cv. BD18). Among the identified candidate ESTs, a cDNA representing a nonsymbiotic hemoglobin gene (designated GhHb1) was further characterized in this study. Northern blot hybridization demonstrated that GhHb1 shares similar characteristics to some other nonsymbiotic hemoglobin genes including the hypoxic stress-induced expression. Sub-cellular localization analysis indicated that GhHb1 proteins were predominantly present in the nucleus with a minor amount appearing in the cytoplasm. Two novel features of GhHb1 were also identified, indicating that GhHb1 expression is activated in the cotton roots after inoculation with V. dahliae and that exogenous hydrogen peroxide induces GhHb1 expression. These results suggest that the GhHb1 may play a role in the defense response of G. hirsutum against V. dahliae invasion.