A multifunctional cotton fabric was prepared by immobilizing bismuth oxyiodide (BiOI) nanosheets on the surface of cotton treated to briefly dissolve surface molecules with upon the low-temperature addition of NaOH and urea (cotton micro-dissolution). Immobilization was accomplished by successive adsorption and reaction (SILAR) at the temperature (~ 25 °C). The morphology, structural characteristics, photodegradation ability for organic pollutants, UV shielding, and self-cleaning of the treated fabric were studied. The growth rate and uniformity of the BiOI nanosheets were compared between the treated fabrics and the untreated fabrics. The absorption wavelength of the cotton fabric with BiOI nanosheets was extended to the visible light (~ 630 nm) region. Under visible light irradiation, cotton fabric containing BiOI nanosheets (BiOI > 8.4 wt%) showed remarkable photocatalytic ability for degrading rhodamine B (RhB) with a degradation rate of 99% (C0 = 20 mg/L) and 95% after the first and sixth cycle, respectively. The ultraviolet protection factor (UPF) of cotton fabric with BiOI nanosheets was > 50, and its transmittance of ultraviolet A (T(UVA)) was < 5%. The cotton fabric with BiOI nanosheets also exhibited superhydrophobic and self-cleaning properties. Thus, the cotton fabric with BiOI nanosheets has great potential for application as a multifunctional protective material.