Field experiment was conducted at Agronomy Farm, B.A.College of Agriculture, Anand Agricultural University, Anand (Gujarat) during kharif seasons for three years (2005-06 to 2007-08) to assess the impact of habitat manipulation on insect pests and their natural enemies in hybrid cotton. The experiment consisted four treatments viz; (1) cotton interspersed with Cassia occidentalis L. (6:1) + sowing/ planting of maize and zinnia @ 10% plants of cotton (2) cotton interspersed with C. occidentalis (6:1) + sowing/planting of maize and zinnia @ 10 % plants + one release of  Trichogramma chilonis Ishi. @ 1.5 lakh/ha and Chrysoperla carnea Stephens @ 5000 larvae /ha. (3) need based insecticidal control and (4) untreated control. Results concluded that sucking pest population in cotton was suppressed significantly in habitat manipulated plots over the plots of untreated check. Reduction in aphid, leafhopper and whitefly numbers due to habitat manipulation over the treatment of insecticides was found to be 85.04, 73.15 and 68.23 %, respectively. Bollworm damage to buds and green bolls also reduced in habitat manipulated plots. Reduction in bollworm incidence to green bolls owing to habitat manipulation was 65.12 % over the treatment of insecticides. Cotton interspersed with other crops with the intense of habitat modification for arthropod natural enemies provided conducive environment to entomophages which resulted into increase in their population. Enhancement of natural enemies in habitat manipulation plots suppressed the pest incidence which in turn reflected on yield. Maximum (2111 kg/ha) seed cotton yield was harvested from the habitat manipulated plots with single release of  T. chilonis and C. carnea followed by the treatment of habitat manipulation but without the release of bioagents. Though the former treatment registered maximum (Rs.18685 /ha) net realization.