In comparison to other types of resilience, livelihood resilience in the context of climate-related extremes like droughts is grounded in actual-life scenarios with the purpose of carefully assessing and improving the resiliency of individuals, households, communities, and nations. This study assesses households' livelihood resilience to droughts in Raya Kobo District. A mixed approach with a concurrent research design was used to achieve this goal. The quantitative data were collected from 354 randomly selected survey respondents, while the qualitative data were collected from purposefully chosen FGD and KI participants. Principal Component Analysis (PCA) and Multiple Linear Regression (MLR) models were employed to analyse the quantitative data, whereas thematic data analysis was used to analyse the qualitative data through the creation of major and sub-themes. To determine households’ livelihood resilience, the livelihood resilience index (LRI) was measured using thirty-eight indicators of resilience based on the five livelihood assets. The study identified fifteen latent dimensions, such as infrastructure, technology, water harvesting scheme, land quality, cropping season, household working capacity, farm experience, educational status, social trust, risk response, social security, support service, income, crop diversity, and assets. The average score of these latent dimensions is 0.3999, suggesting that households in the study area are less resilient. The MLR results show a positive association between the latent dimensions and LRI and the relative importance of the latent dimensions for LRI. These findings provide significant policy implications regarding mitigating vulnerability, strengthening resilience, and establishing pathways out of livelihood insecurity. Education, healthcare, road construction, agricultural inputs (pesticides, herbicides, chemical fertilizers, and improved seeds), irrigation technologies (small-scale drip irrigation systems and human-powered pedals), income diversification, social trust, risk response, social security, support services, and asset building should be the focus of policymakers.