The success of Brazil in a recent WTO dispute that found many aspects of the U.S. cotton program in violation of WTO rules on domestic subsidies could have a profound effect on farm policy in the United States. The ruling has left open the possibility of other cases being filed against U.S. programs, and the threat of litigation has become a driving force behind policy reform in the upcoming 2007 Farm Bill. Owing to the complex nature of the WTO's report, there is merit in presenting the issues and arguments in layman's terms, so that the ruling and its wider significance can be better understood. This paper is aimed at clarifying the cotton case by first providing a brief overview of the WTO rules on agricultural domestic support and how current U.S. farm programs are treated under these rules. Next, a step-by-step walk through of the cotton case is presented, with simple explanations of each section of the ruling. For example, terms such as “serious prejudice” and “price suppression” are described and explained. Finally, the implications of the cotton case on current farm policy are laid out in the context of the upcoming Farm Bill and the current status of the WTO's Doha Round of agricultural negotiations.