Abstract Knowledge gain in the characteristics and mechanisms of drought propagation is indispensable for timely drought early warning and risk reduction over the grassland eco-region. This study focused on the Xilin River basin, which is a typical inland river basin located in the Inner Mongolia temperate steppe, China. The characteristics of meteorological and hydrological drought were assessed by applying the standardized precipitation index and standardized streamflow index. The propagation relationship between meteorological and hydrological droughts was then investigated from both static and dynamic perspectives, and the possible reasons for its temporal dynamics were discussed by considering environmental factors. Our results showed that the Xilin River basin has suffered from more serious meteorological drought than hydrological drought during the past 60 years, with a stationary evolution of meteorological drought but an overall drying trend in hydrological drought. The propagation from meteorological to hydrological droughts exhibited obvious seasonality, characterized by stronger intensity and shorter response time in the wet season. Nonstationary behaviors were identified for the temporal patterns of drought propagation time, especially showing a significant trend in April, May, and August. The dynamic changes in propagation time affected by regional forces were principally ruled by the precipitation variation positively and strongly, and they were moderately controlled by temperature, vegetation cover, and deep-layer soil moisture, with season-dependent effects. The effects of low-frequency atmospheric anomalies on drought propagation will be further investigated in future studies, which are expected to provide a better understanding of the physical mechanism of the large-scale climate forcing on local drought condition. Significance Statement A new research approach was proposed to assess the propagation relationship between meteorological and hydrological drought from both static and dynamic perspectives, and the possible reasons for the temporal dynamics were discussed by considering environmental factors. Focusing on an inland river basin over the Inner Mongolia typical steppe, the propagation from meteorological to hydrological droughts showed obvious seasonality. Nonstationary behaviors were identified for the temporal patterns of drought propagation time, which could be explained by the regional hydrometeorological conditions. The advanced understanding of drought propagation provides a scientific base for water resources planning and drought management within a grassland region.