An aggregate drought index (ADI) has been developed, and evaluated within three diverse climate divisions in California. The ADI comprehensively considers all physical forms of drought (meteorological, hydrological, and agricultural) through selection of variables that are related to each drought type. Water stored in large surface water reservoirs was also included. Hydroclimatic monthly data for each climate division underwent correlation-based principal component analysis (PCA), and the first principal component was deseasonalized to arrive at a single ADI value for each month. ADI time series were compared against the Palmer Drought Severity Index (PDSI) to describe two important droughts in California, the 1976–1977 and 1987–1992 events, from a hydroclimatological perspective. The ADI methodology provides a clear, objective approach for describing the intensity of drought and can be readily adapted to characterize drought on an operational basis.