Drought is a prominent feature of the climate of Hawai‘i with severe impacts in multiple sectors. Over the last century, Hawai‘i has experienced downward trends in rainfall and stream baseflow, an upward trend in the number of consecutive dry days and wildfire incidents, and regional projections show that unusually severe dry seasons will become increasingly common on the leeward sides of all Hawaiian Islands. This talk presents the state of the science on drought in Hawai‘i, and analyzes a new gridded drought index product (SPI, Standardized Precipitation Index) that was developed for the main Hawaiian Islands from 1920 to 2012. This dataset is used to determine the relationships between drought and large-scale modes of natural climate variability (including the El Niño-Southern Oscillation), analyze the spatial extent, frequency, severity, and duration of historical drought events, and examine trends through time. This spatially explicit analysis provides the historical context needed to understand future projections, and contributes to more effective policy and management of natural, cultural, hydrological and agricultural resources.