The loss of life and property from drought events has forced society to focus on the development of reliable early warning systems which may enable farmers and other stakeholders to correctly and timely adapt to the expected impacts of climatic hazard. However, a scientific approach to a reliable early warning system for a region requires, among others, characterisation of drought events in the region in terms of duration, magnitude, intensity and frequency using standard drought indices. Therefore, the objective of this study was to identify and characterise drought events in the Modder River basin, central region of South Africa, using a self-calibrated Palmer’s Drought Severity Index (sc-PDSI). Attempts were also made to establish a relationship between meteorological and hydrological drought events in the region. During the period of analysis, the total number of drought episodes identified in the study area ranged between eight and sixteen. It was found that the most severe drought episodes occurred during the period 1992–1995 followed by the period 1982–1987. Results of analysis of seasonal drought events in one of the quaternary catchments (C52A) revealed that peak drought events during the three summer months (November, December and January) occurred in the area in 1993. However, in terms of event magnitude and intensity, the worst drought events were recorded during the period December 1982–July 1987, followed by the event that ensued during December 1989–September 1995. Results of analysis of decadal variation of drought events showed that the number of extreme and moderate drought events recorded in the catchment showed statistically significant increasing trends during the five decades at 5 % significance level. Moreover, spectral analysis of sc-PDSI time series in the region identified periodicities in the time series ranging from 6 years (C52E) to 16 years (C52K). In terms of the spatial extent of extreme drought events, the maximum areal coverage (91 %) was recorded in November 1998, followed by December 1998 and December–January 1999 (43 %). Analysis of the relative frequency of droughts of varying categories revealed that extreme drought events were most prevalent in the C52E (2.72 %) quaternary catchment, followed by C52C (2.21 %). The study also found an average lag time of 10 months between the onsets of meteorological and hydrological drought events in the region.