Methane was generated from cotton waste, while considering its pollution in textile industries. Cotton waste includes solid content and is rich in cellulose having a moisture content of 8.8%. It is difficult to form slurry as the waste float on water and hence an experimental set up has been made like a batch type digester and experiments were conducted with a different proposition of water with or without addition of seeding materials. It was found that cotton waste with 5 to 7.5% seeding material like cow dung or pig dung at temperatures of 30 to 350C generated bio gas continuously, with a reasonably high yield from the tenth day after feeding. The gas contained rich methane and was tested in a single cylinder diesel engine as a dual fuel had the tendency to save 60% of diesel.