The characteristics of drought variations at different timescales in the Lancang River basin from 1951 to 2012 were studied using a new drought index (standardized precipitation evapotranspiration index, SPEI). The authors calculated this level from daily precipitation data at 10 meteorological stations. Furthermore, the authors used a time series (1998-2012) data set of the normalized difference vegetation index (NDVI) and trend analysis to analyze the inter-annual variation in the valley of the Lancang River and explore the relationship between NDVI and SPEI. The results show that the SPEI values at different sites and time scales showed a significant increased trend to drought, but the upstream situation was much less pronounced than the middle and lower reaches. SPEI values at different time scales vary significantly; the trend of drought is most obvious over a longer time scale. Drought occurred at all seasons—spring, summer, autumn, and winter—but the most serious drought occurred in winter. The regional annual average NDVI in the Lancang River valley decreased first, and the vegetation cover and ecological conditions improved in general. The downstream slope value was the greatest, indicating that vegetative conditions had significantly improved. From the perspective of inter-annual change, the correlation and time lag between the NDVI and SPEI of various scales, and the response varied across the different regions of the basin. In that year, the SPEI and NDVI in the middle and lower reaches showed a swifter response, while there was a significant lag upstream. This result suggests that the response of NDVI for SPEI is sensitive. To some extent, the degree influences vegetation, and SPEI is one of the factors that influences the NDVI.