Nitrogen (N) fertilization is commonly used to regulate plant growth and alleviate abiotic stresses, including waterlogging. The present study examined the effects of N application rates and waterlogging durations on the yield and N utilization of cotton (Gossypium hirsutum L.) and delineated the physiological mechanisms underlying these effects. Three N fertilizer rates (0, 240, and 360 kg N ha−1; designated as N0, N1, and N2, respectively) were applied across four waterlogging durations (waterlogging at the early flowering stage for 0, 5, 10, and 15 d; designated as W0, W5, W10, and W15, respectively). Waterlogging, N deficiency, and a combination of these factors decreased the leaf area, SPAD value, net photosynthetic rate, transpiration rate, stomatal conductance, nitrate reductase, superoxide dismutase, peroxidase, and catalase activities, and soluble protein content of cotton plants. Meanwhile, they increased the contents of malondialdehyde and H2O2, leading to a reduction in plant biomass, N uptake, and the harvest index. This reduced the lint percentage, number of bolls per unit area, and boll weight, thereby reducing lint yield and N use efficiency (NUE). The adverse impacts of waterlogging increased with the waterlogging duration. Moreover, lint yield and NUE were comparable between W5N2 and W5N1 treatments. N2 alleviated the adverse effects of W10 on lint yield and NUE by improving the abovementioned physiological parameters. However, N2 could not attenuate the yield loss and low NUE caused by W15, suggesting that 15 days of waterlogging induces irreversible damage in cotton plants. Notably, 240 and 360 kg N ha−1 application could mediate cotton yield and NUE by improving photosynthesis, antioxidant defense, nitrogen metabolism, and osmoregulation under waterlogging for 5 d and 10 d at the early flowering stage in cotton plants.