The hydrological cycle is an important process for monitoring various functions of the landscape. However, changes from land use and natural events, such as drought, have caused several problems in watersheds, such as water scarcity episodes. Thus, the creation of tools for monitoring these events is important in environmental research. Therefore, the objective of this work is delimiting the potential biomass and elaborates the water balance of the Serra Azul stream sub-basin (MG) to analyze the influence of drought on the water storage of the hydrographic basin. The used methodology involved the calculation of the Vegetation Condition Index (VCI), application of the biomass model and evaluation of water balance. Furthermore, a regression analysis was performed between the analyzed data to verify the influence of the variation in biomass and water balance in the worsening of drought in the study region. The results indicated that variations in land use and the natural changes in the hydrological cycle contributed to the worsening of drought proving the effectiveness of biomass model associated to water balance and VCI data for monitoring drought.