Osmotin is classified as the pathogenesis-related protein 5 group. However, its molecular mechanism involved in plant disease resistance remains largely unknown. Here, a Verticillium wilt (VW) resistance-related osmotin gene is identified in Gossypium barbadense (Gb), GbOSM1. GbOSM1 is preferentially expressed in the roots of disease-resistant G. barbadense acc. Hai7124 and highly induced by Verticillium dahliae (Vd). Silencing GbOSM1 reduces the VW resistance of Hai7124, while overexpression of GbOSM1 in disease-susceptible G. hirsutum improves tolerance. GbOSM1 predominantly localizes in tonoplasts, while it relocates to the apoplast upon exposure to osmotic stress or Vd infection. GbOSM1 confers VW resistance by hydrolyzing cell wall polysaccharides of Vd and activating plant immune pathways. Natural variation contributes to a differential CCAAT/CCGAT elements in the OSM1 promoter in cotton accessions. All G. hirsutum (Gh) exhibit the CCAAT haplotype, while there are two haplotypes of CCAAT/CCGAT in G. barbadense, with higher expression and stronger VW resistance in CCGAT haplotype. A NFYA5 transcription factor binds to the CCAAT element of GhOSM1 promoter and inhibits its transcription. Silencing GhNFYA5 results in higher GhOSM1 expression and enhances VW resistance. These results broaden the insights into the functional mechanisms of osmotin and provide an effective strategy to breed VW-resistant cotton.