The incompatible pathosystem between resistant cotton (Gossypium barbadense cv. 7124) and Verticillium dahliae strain V991 was used to study the cotton transcriptome changes after pathogen inoculation by RNA-Seq. Of 32,774 genes detected by mapping the tags to assembly cotton contigs, 3442 defence-responsive genes were identified. Gene cluster analyses and functional assignments of differentially expressed genes indicated a significant transcriptional complexity. Quantitative real-time PCR (qPCR) was performed on selected genes with different expression levels and functional assignments to demonstrate the utility of RNA-Seq for gene expression profiles during the cotton defence response. Detailed elucidation of responses of leucine-rich repeat receptor-like kinases (LRR-RLKs), phytohormone signalling-related genes, and transcription factors described the interplay of signals that allowed the plant to fine-tune defence responses. On the basis of global gene regulation of phenylpropanoid metabolism-related genes, phenylpropanoid metabolism was deduced to be involved in the cotton defence response. A closer look at the expression of these genes, enzyme activity, and lignin levels revealed differences between resistant and susceptible cotton plants. Both types of plants showed an increased level of expression of lignin synthesis-related genes and increased phenylalanine-ammonia lyase (PAL) and peroxidase (POD) enzyme activity after inoculation with V. dahliae, but the increase was greater and faster in the resistant line. Histochemical analysis of lignin revealed that the resistant cotton not only retains its vascular structure, but also accumulates high levels of lignin. Furthermore, quantitative analysis demonstrated increased lignification and cross-linking of lignin in resistant cotton stems. Overall, a critical role for lignin was believed to contribute to the resistance of cotton to disease.