A 3-yr field study quantified the compensatory ability of cotton (Gossypium hirsutum L.) to preflower fruit damage by Lygus hesperus Knight in the Texas High Plains under limited irrigation. Experiments were designed to achieve varying levels of preflower fruit loss by augmenting Lygus bug populations using nymphal bugs reared in a laboratory colony. Treatments included 1) three bugs per plant (3PP), 2) one bug per plant (1PP), 3) naturally occurring background bug density or untreated control (NC), and 4) 0 bugs achieved through insecticide spray applications (SC). Lygus release treatments (3PP and 1PP) were initiated at early fruiting (squaring) and repeated weekly for a total of three consecutive weeks. Two levels of Lygus bug infestations, one insect per plant (1PP) and three insects per plant (3PP), inflicted fruit loss percentages of 24–38 during the maximum fruit set period. Observations on the number of fruit lost at the crop preharvest stage indicate that plants receiving the 3PP and 1PP treatments exhibited higher ability to restrain physiological fruit loss when compared with the two control treatments (NC and SC). Cotton plants could not fully compensate the yield loss because of fruit damage caused by Lygus bugs at the observed level of damage. The total lint yields in the 1PP and 3PP treatments were 114 and 118 kg/ha lower, respectively, compared with that in treatment SC. The reduction in yield was primarily because of the loss of first fruiting position bolls. However, lint yields from bolls other than first position of the cotton plant were similar across treatments. Fiber quality data indicated an increase in fiber length from insect release treatment plants compared with the two control treatments.