Drought remains one of the most critical climate-related challenges in Kenya and Ethiopia. Rising temperatures and decreasing rainfall patterns are causing drought more frequent, severe, and widespread. The complex connection between drought dynamics and climate variability in both countries is examined in this chapter, along with their significant financial consequences and livelihood vulnerabilities. Through a narrative review of peer-reviewed literature and policy documents, the study reveals that drought frequency in Kenya’s Arid and Semi-Arid Lands has significantly increased from once every ten years (1960s–1970s) to once every two to three years (1990s). In 2010 and 2011, the drought alone caused Kenya’s GDP to decline by 2.8% per year, resulting in losses of USD 12.1 billion, while millions of Ethiopians needed emergency food assistance. Vulnerability patterns demonstrate significant gender, age, and wealth disparities, with women and children disproportionately bearing drought burdens. Due to a lack of institutional capacity, insufficient funding, and poor coordination, implementation gaps continue despite the existence of policy frameworks, such as early warning systems and national adaptation plans. In order to increase community resilience against growing drought risks in East Africa, the chapter highlights the critical need for improved drought monitoring that incorporates atmospheric evaporative demand, climate-resilient infrastructure, livelihood diversification strategies, and strengthened institutional coordination.