The CLAVATA3 (CLV3)/EMBRYO SURROUNDING REGION (ESR)-RELATED (CLE) gene family encodes a large number of polypeptide signaling molecules involved in the regulation of shoot apical meristem division and root and vascular bundle development in a variety of plants. CLE family genes encode important short peptide hormones; however, the functions of these signaling polypeptides in cotton remain largely unknown. In the current work, we studied the effects of the CLE family genes on growth and development in cotton. Based on the presence of a conserved CLE motif of 13 amino acids, 93 genes were characterized as GhCLE gene family members, and these were subcategorized into 7 groups. A preliminary analysis of the cotton CLE gene family indicated that the activity of its members tends to be conserved in terms of both the 13-residue conserved domain at the C-terminus and their subcellular localization pattern. Among the 14 tested genes, the ectopic overexpression of GhCLE5::GFP partially mimicked the phenotype of the clv3 mutant in Arabidopsis. GhCLE5 could affect the endogenous CLV3 in binding to the receptor complex, comprised of CLV1, CLV2, and CRN, in the yeast two-hybrid assay and split-luciferase assay. Silencing GhCLE5 in cotton caused a short seedling phenotype. Therefore, we concluded that the cotton GhCLE gene family is functionally conserved in apical shoot development regulation. These results indicate that CLE also plays roles in cotton development as a short peptide hormone.