LIN-11, Isl1 and MEC-3 (LIM)-domain proteins play pivotal roles in a variety of cellular processes in animals, but plant LIM functions remain largely unexplored. Here, we demonstrate dual roles of the WLIM1a gene in fiber development in upland cotton (Gossypium hirsutum). WLIM1a is preferentially expressed during the elongation and secondary wall synthesis stages in developing fibers. Overexpression of WLIM1a in cotton led to significant changes in fiber length and secondary wall structure. Compared with the wild type, fibers of WLIM1a-overexpressing plants grew longer and formed a thinner and more compact secondary cell wall, which contributed to improved fiber strength and fineness. Functional studies demonstrated that (1) WLIM1a acts as an actin bundler to facilitate elongation of fiber cells and (2) WLIM1a also functions as a transcription factor to activate expression of Phe ammonia lyase-box genes involved in phenylpropanoid biosynthesis to build up the secondary cell wall. WLIM1a localizes in the cytosol and nucleus and moves into the nucleus in response to hydrogen peroxide. Taken together, these results demonstrate that WLIM1a has dual roles in cotton fiber development, elongation, and secondary wall formation. Moreover, our study shows that lignin/lignin-like phenolics may substantially affect cotton fiber quality; this finding may guide cotton breeding for improved fiber traits.