The Poyang Lake Wetland, an internationally significant ecosystem, frequently experiences drought during the flood season. However, the total impact of extreme drought on wetland vegetation remains poorly understood. This study determined the standardised precipitation evapotranspiration index (SPEI) and analysed drought trends within the Poyang Lake Basin. Additionally, spatiotemporal variations in wetland vegetation under drought conditions were examined by analysing the mean normalised difference vegetation index (NDVI) values and categorising NDVI classifications. The key factors affecting wetland vegetation and its respective thresholds were determined. The Poyang Lake Basin has experienced increasing aridity over the past 3 years. In response to this trend, the wetland vegetation area in Poyang Lake expanded, whereas vegetation greenness declined. Notably, in the year following an extreme drought, Poyang Lake’s vegetation greenness was lower than that during the same period in previous years. Regardless, the correlation analysis showed no significant relationship between the SPEI values and the wetland vegetation greenness; however, water level changes significantly impacted the wetland vegetation, with a correlation coefficient of −0.89 (p < 0.001). A critical water level of 14 m was identified as the threshold at which sudden changes in the mean NDVI were observed. This research offers valuable insights into hydrological management strategies to protect Poyang Lake Wetland’s vegetation under drought conditions. Future studies should enhance the differentiation of drought tolerance among different wetland plant species, thereby achieving differentiated hydrological management.