The BRASSINAZOLE-RESISTANT (BZR) transcription factor is a core component of brassinosteroid (BR) signaling and is involved in the development of many plant species. BR is essential for the initiation and elongation of cotton fibers. However, the mechanism of BR-regulating fiber development and the function of BZR is poorly understood in Gossypium hirsutum L. (cotton). Here, we identified a BZR family transcription factor protein referred to as GhBZR3 in cotton. Overexpression of GhBZR3 in Arabidopsis caused shorter root hair length, hypocotyl length, and hypocotyl cell length, indicating that GhBZR3 negatively regulates cell elongation. Pathway enrichment analysis from VIGS-GhBZR3 cotton plants found that fatty acid metabolism and degradation might be the regulatory pathway that is primarily controlled by GhBZR3. Silencing GhBZR3 expression in cotton resulted in taller plant height as well as longer fibers. The very-long-chain fatty acid (VLCFA) content was also significantly increased in silenced GhBZR3 plants compared with the wild type. The GhKCS13 promoter, a key gene for VLCFA biosynthesis, contains two GhBZR3 binding sites. The results of yeast one-hybrid, electrophoretic mobility shift, and luciferase assays revealed that GhBZR3 directly interacted with the GhKCS13 promoter to suppress gene expression. Taken together, these results indicate that GhBZR3 negatively regulates cotton fiber development by reducing VLCFA biosynthesis. This study not only deepens our understanding of GhBZR3 function in cotton fiber development, but also highlights the potential of improving cotton fiber length and plant growth using GhBZR3 and its related genes in future cotton breeding programs.