Compound drought and heatwaves (CDH) have garnered increasing attention because concurrent extreme events can exacerbate the harmful impacts caused by univariate extremes. However, various severities in CDH events and their relationships with sea surface temperature (SST) variations in China remain little understood. Here, we accurately identify CDH events and multi-aspect of characteristics using the standardized precipitation evapotranspiration index (SPEI) and the excess heat factor (EHF) during the extended summer (May–September) of 1961–2017. The evolution of multifaceted characteristics of CDH and their association with SST variation are further explored. The results suggest that the number, frequency, duration and intensity of regional CDH events show heterogeneous spatial patterns, with a significant increasing trend. A consistent abrupt transition in CDH characteristics averaged over China occurred in the period of 1993–1996. Mild and moderate CDHs occur more commonly in Northwest and North China, whereas severe CDHs are mainly found in central and eastern regions. Mild and moderate CDHs are more susceptible to SST modes than severe CDH, and there are strong positive correlations between mild and moderate CDH characteristics and SST variations in the northwest and northern regions. Compared to El Niño-Southern Oscillation (ENSO), Indian Ocean Dipole (IOD) plays a dominant role in the intensifications of mild and moderate CDH events. Regionally, the northwest and north have experienced longer, more frequent and severe CDH events during the positive phase of IOD. These findings reveal the divergent evolutions in CDH characteristics with various severities and inconsistent impacts of different SST modes on the compound events.