Drought is a natural phenomenon that has adverse effects on agriculture, the economy, and human well-being. The primary objective of this research was to comprehensively understand the drought conditions in Sistan and Balouchestan Province from 2002 to 2017 from two perspectives: vegetation cover and hydrology. To achieve this goal, the study utilized MODIS satellite data in the first part to monitor vegetation cover as an indicator of agricultural drought. In the second part, GRACE satellite data were employed to analyze changes in groundwater resources as an indicator of hydrological drought. To assess vegetation drought, four indices were used: Vegetation Health Index (VHI), Vegetation Drought Index (VDI), Visible Infrared Drought Index (VSDI), and Temperature Vegetation Drought Index (TVDI). To validate vegetation drought indices, they were compared with Global Land Data Assimilation System (GLDAS) precipitation data. The vegetation indices showed a strong, statistically significant correlation with GLDAS precipitation data in most regions of the province. Among all indices, the VHI showed the highest correlation with precipitation (moderate (0.3–0.7) in 51.7% and strong (≥0.7) in 45.82% of lands). The output of vegetation indices revealed that the study province has experienced widespread drought in recent years. The results showed that the southern and central regions of the province have faced more severe drought classes. In the second part of this research, hydrological drought monitoring was conducted in fifty third-order sub-basins located within the study province using the Total Water Storage (TWS) deficit, Drought Severity, and Total Storage Deficit Index )TSDI Index). Annual average calculations of the TWS deficit over the period from April 2012 to 2016 indicated a substantial depletion of groundwater reserves in the province, amounting to a cumulative loss of 12.2 km3 Analysis results indicate that drought severity continuously increased in all study basins until the end of the study period. Studies have shown that all the studied basins are facing severe and prolonged water scarcity. Among the 50 studied basins, the Rahmatabad basin, located in the semi-arid northern regions of the province, has experienced the most severe drought. This basin has experienced five drought events, particularly one lasting 89 consecutive months and causing a reduction of more than 665.99 km3. of water in month 1, placing it in a critical condition. On the other hand, the Niskoofan Chabahar basin, located in the tropical southern part of the province near the Sea of Oman, has experienced the lowest reduction in water volume with 10 drought events and a decrease of approximately 111.214 km3. in month 1. However, even this basin has not been spared from prolonged droughts. Analysis of drought index graphs across different severity classes confirmed that all watersheds experienced drought conditions, particularly in the later years of this period. Data analysis revealed a severe water crisis in the province. Urgent and coordinated actions are needed to address this challenge. Transitioning to drought-resistant crops, enhancing irrigation efficiency, and securing water rights are essential steps towards a sustainable future.