Cottony willow is found across much of temperate Canada and the United States, including Ontario and Quebec. It grows along rivers and lakeshores, in swamps, wet meadows and wetland margins, and is rated as a facultative wetland species. Its early catkins are a spring food source for insects, and it hosts the caterpillars of the mourning cloak butterfly.
The species was described by André Michaux, and the epithet eriocephala means woolly-headed, referring to the silky catkins. It is also known as Missouri River willow. Its tough, flexible branches have been used in basket weaving, and willow bark contains salicylic acid compounds related to aspirin.