McCrory spoke of the successes of his first term in office.
"This is the Carolina comeback. We've got a long way to go, but the progress we've made in last three years is progress we've never seen," he said.
But Cooper quickly disagreed.
"I think Governor McCrory has failed us and put an extreme social partisan agenda ahead of jobs and schools and we've all paid the price," he offered.
MEN CLASH OVER HB2
The debate, hosted by the NC Bar Association in Charlotte, quickly turned to North Carolina's controversial HB2 law.
HB2 was designed to block a Charlotte non-discrimination ordinance, part of which allowed transgender people to use bathrooms and locker rooms of the gender they identify with. The state law requires people to use the restroom according to their biological sex listed on their birth certificate in government buildings, schools, and universities. The law also excludes lesbian, gay, bisexual and transgender people from anti-discrimination protections and blocks municipalities from adopting their own anti-discrimination and living wage rules.
Speaking Friday, Governor McCrory said HB2 has become a national issue and he blasted the original Charlotte ordinance and federal attempts to overturn HB2 as government overreach.
"I believe that the private sector should not be told by the mayor of Charlotte, or by the City of Charlotte, or by the State of North Carolina, or by the federal government what their bathroom and shower policies should be," said McCrory.
But Cooper called HB2 a national embarrassment for North Carolina.
"Governor McCrory wants to make this campaign be about where you go to the bathroom. I want this campaign to be about where North Carolina goes from here. The governor has gone all over national TV talking about bathrooms and not only that, criticizing North Carolina companies for stepping up and saying House Bill 2 is wrong," said Cooper.
WATCH: MCCRORY AND COOPER ON HB2
The two men also spent time debating the state of education in North Carolina and pay for teachers. The state ranked 41st in the nation in 2016 for teacher pay and 44th in per-pupil spending.
Asked what he'd tell a recent college graduate who wants to be a teacher, Cooper responded with "I'd tell them to teach right here in North Carolina because hold on I'm coming," to laughs from the audience.
Cooper said when he served in the General Assembly he worked with Governor Hunt to get teacher salaries above the national average.
"What we have to do is tell teachers we respect them. We have to stop sending public money to private school vouchers and make sure we channel that money to give students the resources they need," he said.
In his response, Governor McCrory said North Carolina's teacher pay ranking slid to near the bottom under governors Easley and Perdue - who he pointed out Cooper supported.
"Since I've come into office, the first thing we did was raise entry-level teacher pay by $5,000," he said. "Since then, we've given the largest teacher pay raises in the United States of America."
WATCH: COOPER AND MCCRORY ON EDUCATION
WATCH THE ENTIRE DEBATE
MORE DEBATES TO COME AS RACE HEATS UP
In a step outside conventional political patterns, McCrory wants more debates, Cooper wants less. Usually, challengers want more debates than incumbents.
As a backdrop to the debate, two separate ads went up against the Governor Friday; one by Cooper's campaign, the other by a super PAC supporting the Attorney General.
Click here to see Cooper's ad on his Facebook page.
McCrory's campaign has accused Cooper of encouraging economic damage to North Carolina over the HB2 issue - saying he has endorsed boycotts of the state.