Transgenic plants with desirable gene are biotechnological tool to alleviate food deficiencies in sustainable agriculture. Cotton (Gossypium hirsutum L.) is an important fiber crop and a source of raw materials for the textile industry. Drought stress is an utmost factor that ravages cotton quality and limits crop production. Transgenic plants with overexpression of AVP1 gene have ability to survive in salt and water stress conditions. However, introduction of transgenic plants can affect rhizosphere environment. Bacterial abundance, survival and plant growth promotion activities can be good indicators to study the effects of transgenic plants in rhizospheric environment. Present study demonstrated that culturable bacterial populations were not significantly different in the rhizosphere of AVP1 transgenic (TC) and non-transgenic (NTC) cotton plants at three different growth stages. Three bacterial strains were isolated from the rhizosphere of cotton and identified as Arthrobacter, Azospirillumand Brevibacillus spp. based on 16S rRNA gene sequence analysis. Plant growth promoting traits i.e. phosphate solubilization and phytohormone (IAA) production were detected in all three bacterial isolates. Growth promotion of transgenic and non-transgenic cotton plants by inoculation of these three strains indicated significant increase in growth and yield of both TC and NTC plants. Maximum growth promotion was observed in plants inoculated with Brevibacillus spp. strain TN4-3NF which showed an increase of 17.9% in root dry weight, 18.4% in shoot dry weight, 17.6% in yield of TC-pants, and 14.4% in root dry weight, 5.5% in shoot dry weight, and 13.9% in yield of NTC-plants compared with respective non-inoculated controls. From the present study it can be concluded that transgenic plants have no apparent drastic effect on rhizosphere microflora and both the AVP1 transgenic and non-transgenic cotton plants are equally responsive to bacterial inoculations.