The spatio-temporal variations of terrestrial water storage, vegetation index and precipitation in the Huaihe River Basin from 2003 to 2016 were studied based on GRACE satellites data, MODIS data and precipitation data. We further discussed the indication of standardized water storage index(SWSI), standardized precipitation index(SPI)and vegetation condition index(VCI)to the watershed drought. The results show that the terrestrial water storage in the Huaihe River Basin is in a significant trend of decline, and the average annual precipitation shows a slight decline, while the average annual vegetation coverage rises significantly. The correlation between the SPI and VCI is relatively high, which is in a good consistency with the variation of SWSI. The numbers of months with drought at various levels indicated by SPI and SWSI are almost the same and are much less than that indicated by VCI. The historical drought in the Huaihe River Basin is underreported by SPI and the drought level indicated by VCI is slightly higher. The overall performance of SWSI is good, which can monitor the drought situation in the Huaihe River Basin effectively.