As a notable illustration of totipotency and plant regeneration, somatic embryogenesis (SE) is the developmental reprogramming of somatic cells toward the embryogenesis pathway, the key step for genetic engineering. Investigations examining the totipotency process are of great fundamental and practical importance in crop biotechnology. However, high-frequency regeneration of cotton via SE has been limited due to genotype-dependent response. The molecular basis deciphering SE genotype recalcitrance remains largely unexplored in cotton. In the current study, to comprehensively investigate the dynamic transcriptional profiling and gene regulatory patterns involved in SE process, a genome-wide RNA sequencing analysis was performed in two cotton genotypes with distinct embryogenic abilities, the highly embryogenic genotype Yuzao 1 (YZ) and the recalcitrant genotype Lumian 1 (LM). Three typical developmental staged cultures of early SE—hypocotyls (HY), nonembryogenic calli (NEC) and primary embryogenic calli (PEC)—were selected to establish the transcriptional profiles. Our data revealed that a total of 62,562 transcripts were present amongst different developmental stages in the two genotypes. Of these, 18,394 and 26,514 differentially expressed genes (DEGs) were identified during callus dedifferentiation (NEC-VS-HY) and embryogenic transdifferentiation (PEC-VS-NEC), respectively in the recalcitrant genotype, 21,842 and 22,343 DEGs in the highly embryogenic genotype. Furthermore, DEGs were clustered into six expression patterns during cotton SE process in the two genotypes. Moreover, functional enrichment analysis revealed that DEGs were significantly enriched in fatty acid, tryptophan and pyruvate metabolism in the highly embryogenic genotype and in DNA conformation change otherwise in the recalcitrant genotype. In addition, critical SE-associated expressed transcription factors, as well as alternative splicing events, were notably and preferentially activated during embryogenic transdifferentiation in the highly embryogenic genotype compared with the recalcitrant genotype. Taken together, by systematically comparing two genotypes with distinct embryogenic abilities, the findings in our study revealed a comprehensive overview of the dynamic gene regulatory patterns and uncharacterized complex regulatory pathways during cotton SE genotype-dependent response. Our work provides insights into the molecular basis and important gene resources for understanding the underlying genotype recalcitrance during SE process and plant regeneration, thereby holding great promise for accelerating the application of biotechnology to cotton for improving its breeding efficiency.