Kenya is a drought, famine and hunger prone country, with considerable impact on agriculture, human health and livestock due to its eco-climatic conditions. It contains only a few regions of high and regular rainfall where arid and semi-arid lands cover 80% of the territory, therefore periodical droughts are part of the climate system. Some drought studies undertaken in Kenya used Standardized Precipitation Index (SPI) which could not fully account for drought severity status as the role of temperature increase on drought conditions was not taken into account. This study has tried to fill the gap by using Standardized Precipitation Evapotranspiration Index (SPEI), which includes precipitation, a temperature component and evapotranspiration in its computations. SPEI and the Normalized Difference Vegetation Index Anomaly (NDVI) were applied to characterize drought in Kenya from 1987 to 2016, investigate the drought severity and duration in the same period, assess drought trends together with mapping of spatial distribution of drought in identified months, assessment of Agricultural, meteorological and socio-economic activities. Correlation analysis was done to understand the response of climate and satellite based drought monitoring indices results and the crop yield data. The results and analysis obtained from the study showed that the years 1987, 1998, 2000, 2001, 2005, 2006, 2008, 2009, 2010, 2011 and 2015 were considered as drought years based on their SPEI and NDVI anomaly results. They were classified as extremely dry, very dry and moderately dry for meteorological drought and slight, moderate, severe and very severe for Agricultural drought. SPEI results can be rated as being superior as the element of temperature variation is taken into consideration.