A field trial consisting of cotton grown employing a combination of ridge planting, mulching with film, and drip irrigation was laid out on a plot with severely saline soil in a typical inland arid area of Xinjiang. The effect of five levels of soil matric potential set up 0.2 m below the drip emitter, namely −5 kPa, −10 kPa, −15 kPa, −20 kPa, and −25 kPa, were studied in terms of changes in soil salinity (ECe), sodicity (SAR), crop growth and yield components. Drip irrigation increased the leaching of soil salts and decreased the ECe and SAR of each soil layer. Although the levels of soil salt rose again, in spring and winter, after irrigation was discontinued, the root zone (0–40 cm) remained less saline: the ECe and SAR value under the soil matric potential of −5 kPa and −10 kPa were 63% and 49% of its values in 2009 respectively, before the land was brought under cultivation (p ≤ 0.05), showing maximum leaching. The yield of cotton peaked at the soil matric potential of −5 kPa. The germination rate, which was the main factor that influenced the cotton yield, was 67% of that in non-saline soil in the first two years, and increased to 84% in the third year. After three years, the rate of germination in all the treatments exceeded 67%, and the highest rate (78%) was at −5 kPa; in the same treatment, boll yield was 4.40 g per plant. Except for germination rate and the yield of lint and seed, all the yield components increased significantly (p ≤0.05) as ECe and SAR decreased in 2010 and 2011. The correlation between soil salt (salinity and sodicity) and other components such as the number of cotton bolls per plant, the average weight of a boll, and lint percentage varied, probably because water supply was being regulated and, as a result, the physicochemical properties of the soil kept changing constantly. Taking into account the extent of leaching, crop growth, and yield, the lower limit for the soil matric potential should be −5 kPa at 20 cm below the dripper for the first three years during reclamation to promote cotton cultivation on the saline-sodic soil of Xinjiang.