It is located in southwestern Minnesota within Brown, Cottonwood, Lyon, Murray, and Redwood counties. There are 21 municipalities in the watershed of which the city of New Ulm is the largest. The Cottonwood River major watershed area is approximately 1,313 square miles or 840,190 acres. The watershed is subdivided into 108 minor watersheds. The minor watersheds range in size from 2,311 acres to 28,324 acres with the mean size approximately 7,780 acres.
Agriculture is the predominant land use within the watershed.
The Cottonwood River and its tributaries, public and private drainage systems, lakes and wetlands, define the drainage network of the major watershed. The Cottonwood River flows east to its confluence with the Minnesota River near the city of New Ulm in Brown County. The total distance of the stream network is 1,932 miles of which 1,337 miles are intermittent streams and 595 miles are perennial streams.