Waterlogging stress hampers cotton growth and development, ultimately causing yield loss. Nitric oxide (NO) was previously found to alleviate waterlogging damage to cotton plants, but it is unclear whether NO can enhance compensatory growth after waterlogging relief. Herein, field-grown cotton ( Gossypium hirsutum L.) plants at peak flowering were subjected to a 10-day waterlogging stress treatment, and the effects of foliar spraying of sodium nitroprusside (SNP)—a NO donor—during waterlogging were evaluated. The NO concentrations in the plant tissues, plant biomass, and related physiological events at 10 d post-waterlogging relief, as well as the seedcotton yield and yield components at harvest, were measured over two consecutive years. Non-waterlogged and waterlogged cotton exhibited 38.5% and 48.3% increased plant biomass at 10 d post-waterlogging relief, respectively, compared with that on the day of stress relief, indicating that significant compensatory growth occurred following stress relief. Foliar spraying cotton with SNP during waterlogging not only increased the NO concentration (40–183%) before stress relief, but also increased the NO concentration (30–75%) after stress relief compared with no SNP application. As the NO concentration increased, plant biomass at 10 d post-waterlogging, as well as biological yield, boll density, and seedcotton yield of waterlogged cotton at harvest, were increased by 54.4%, 8.0%, 7.5%, and 7.6% under foliar SNP spraying compared to no SNP spraying, indicating that NO promoted compensatory growth and reduced the yield loss of waterlogged cotton. Correlation analysis showed that yield loss reduction was positively correlated with compensatory growth (R 2 = 0.83 ** ). Foliar spraying of SNP decreased the malondialdehyde content and the activities of alcohol dehydrogenase and pyruvate decarboxylase in waterlogged cotton at 10-d post stress relief by 15.2%, 42.4%, and 38.2%, but increased the contents of auxin (IAA), gibberellic acid (GA), and chlorophyll and the photosynthetic rate by 28.6%, 59.6%, 12.1%, and 6.4%, respectively, and decreased the abscisic acid (ABA) and ethylene contents by 12.5% and 8.5%, respectively, compared to no SNP spraying. In conclusion, foliar spraying of SNP increased the content of NO in waterlogged cotton plants even at 10-d post stress. Hormonal rebalance was realized through increased IAA and GA and reduced ABA and ethylene due to the elevated NO content, which promoted photosynthetic recovery and compensatory growth after stress relief, ultimately reducing yield loss. The overall results indicated that enhancing the compensatory growth of cotton after waterlogging is an important mechanism by which NO mitigates waterlogging stress. • Nitric oxide enhanced the compensatory growth of waterlogged cotton and reduced the yield loss. • Enhanced compensatory growth by nitric oxide was achieved through physiological adjustments after waterlogging relief. • The reduction of yield loss was correlated with the compensatory growth of waterlogged cotton. • Enhanced compensatory growth by NO is an important attribute to the yield loss reduction under waterlogging.