The instantaneous transpiration efficiency (ITE, the ratio of photosynthesis rate to transpiration) is an important variable for crops, because it ultimately affects dry mass production per unit of plant water lost to the atmosphere. The theory that stomata optimize carbon uptake per unit water used predicts that ITE should be proportional to the atmospheric [CO2] (Ca), approximately inversely proportional to the square root of the leaf-to-air vapour pressure deficit (Ds), and weakly dependent on leaf temperature (Tleaf). We measured the response of ITE to a range in Ds at constant air temperature (Tair), for two cultivars (DP16 and Sicot 71BRF) of cotton (Gossypium hirsutum L.) grown in two Ca (400 and 640μll-1) and two Tair (28 and 32°C) treatments. To interpret responses of ITE to these variables, we used a model based on the assumption that stomata are regulated to optimize carbon uptake per unit water used. The measured ITE response to Ds was very close to that predicted by the model, but ITE was overpredicted at low Ds. We found that one model adequately fit all Tair and Ca treatments, and found no significant differences in the single parameter of the model with Ca, Tair, or cultivar. As predicted, ITE increased in proportion to Ca (a 51-64% increase in ITE compared to a 60% increase in Ca). Photosynthesis rate was 16-22% higher in the elevated Tair treatment, which led to a corresponding increase in transpiration rate at a given Ds, again as predicted. The results show that, in cotton, a straightforward framework based on optimal stomatal theory successfully predicted responses of ITE to Ds, Tair, and Ca. These findings greatly simplify modelling of an important component of crop water-use efficiency in response to climate change.