Abstract: The risk early-warning system was designed based on information technology in order to reduce the risk of cotton production and management. The goal to develop the early-warning system was to monitor, analyze and forecast dynamically production, demand, stock, inputs and exports, and make market analysis of cotton. During setting up the system, first, based on information to avoid all kinds of cotton risks of production and management in order to reduce uncertainty, the design idea, structure, function and its application of cotton risk early-warning were analyzed in this paper. Second, the supply and demand factors including uncertainty which influence the form of cotton risk were analyzed, and the market risk was thought to be the last embody, through the modern economic theory. So the cotton price was selected to be the key control variable in this early-warning system. Alarm should not be given when the market price is higher than the equilibrium price; Light alarm should be given when the market price is between the equilibrium price and protection point; Heavy losing alarm should be given when market price is lower than the protection point price. The cotton farmers can be guided according to the former information to readjust planting structure and to realize risk management and promote the sustainable development of cotton.