This study proposes a stratified approach of drought severity assessment using multi-layer simulated soil moisture. SWAT (Soil and Water Assessment Tool) models are calibrated for 50 watersheds in the South-Atlantic Gulf region of the Southeastern US and a high-resolution daily soil moisture dataset is obtained at Hydrologic Unit Code (HUC-12) resolution for a period of January 1982 through December 2013. A near real-time hydrologic simulation framework by coupling the calibrated SWAT models with the National Centers for Environmental Prediction (NCEP) coupled forecast system model version 2 (CFSv2) weather data is developed to forecast various water balance components including soil moisture (SM), actual evapotranspiration (ET), potential evapotranspiration ET (PET), and runoff (SURQ) for near-real time drought severity assessment, and drought forecasting for a lead of 9-months. A combination of the surface and total rooting depth soil moisture percentiles proves to be an effective increment over conventional drought assessment approaches in capturing both, transient and long-term drought impacts. The proposed real-time drought monitoring approach shows high accuracy in capturing drought onset and propagation and shows a high degree of similarity with the U.S. Drought Monitor (USDM), the long-term (PDSI, PHDI, SPI-9 and SPI-12), and the short-term (Palmer Z index, SPI-1 and SPI-6) drought indices. / Master of Science / Drought, a recurring and worldwide phenomenon, with spatial and temporal characteristics varying significantly from across globe, lead to long-term and cumulative environmental changes. Often referred to as creeping phenomena, droughts are difficult to predict and constant monitoring is required to capture the signs of the onset of drought. Spatial variability in drought severity requires an understanding of the hydrology of the region and a knowledge of the relationship between drought inducing climatic extremes and other regional or local characteristics which help build, sustain and propagate droughts. In the absence of long-term observed hydrologic variables like soil moisture, evapotranspiration, simulated hydrologic variables serve an important purpose in understanding the impact of drought on various components of the water budget. However, several continental scale, physics-based models, and large scale remote sensing products find themselves restricted in explaining the watershed scale and sub-watershed scale variability in relation to drought. This study provides a high-resolution simulation of hydrological variables for 50 watersheds in the South-Atlantic Gulf region of the Southeastern US. The high resolution hydrologic simulations provide bedrock for retrospective drought simulations and understanding the response of various hydrologic variables of these watersheds to drought. It also aids in understanding the spatial variability in the relationship, and understanding the impact of seasonality and hydroclimatology on drought. The understanding of the interplay of various water budget components at watershed scale is used in developing a reliable seasonal drought forecasting framework based on the forecasted hydrologic variables from SWAT-CFSv2 coupled models for application in real time with a lead time of 9 months.