Compared with a single drought event, compound drought (i.e., two or more droughts occurring simultaneously) has more substantial effects on economic growth, water resources, and the ecological environment. A useful framework for assessing compound drought events from a drought propagation perspective was proposed. The framework includes the definition, identification, and risk assessment of compound drought. We defined compound drought as a drought event from a drought propagation perspective when meteorological drought and hydrological drought occur simultaneously. The Standardized Streamflow Index (SSI) and Standardized Precipitation Index (SPI) were used to represent hydrological and meteorological drought, respectively. By applying a certain truncation threshold of run theory, the compound drought events in the time series were identified and characterized according to their duration and severity. Five univariate distribution functions (i.e., Log-normal, Exponential, Gamma, Weibull, and Pareto) and four bivariate copula models (i.e., Gaussian, Clayton, Frank, and Gumbel) were used for fitting both the duration and severity of compound drought and their joint return periods. A 40-year monthly streamflow and precipitation dataset from the Dongjiang River Basin, which is located on the southern coast of China, was used as a case study. The characteristics of compound drought, including duration and severity, were captured by considering the time continuity of meteorological and hydrological droughts from a drought propagation perspective based on run theory. The most severe compound droughts in the study area were observed in 1963 and 2004–2005. The characteristics of compound drought duration and severity were related to the timescale of the drought index (i.e., SSI and SPI). For the study basin, the SPI at a 2–3-month timescale better matched the SSI on the monthly timescale compared with other timescales. The Gaussian-copula function better characterized the joint return periods between the duration and severity of compound drought compared with three other copula models. Although reservoir regulation played an important role in decreasing the duration (lower by 8.25%) and severity (lower by 9.27%) of compound drought, it had little effect on extreme compound drought events. Overall, the results indicated that the proposed method provides a useful tool for statistical assessments of compound drought from a drought propagation perspective. This framework could also be applied to other regions.