Agricultural drought is a creeping disaster that overshadows the vegetative cover in general and cropland specifically in Iraq, a country that was well known for its agricultural production and fertile soil. In the recent years, the arable lands in Iraq experienced increasing land degradation that led to desertification, economic losses, food insecurity, and deteriorating environment. Remote sensing is employed in this study and four different indices are utilized, each of which is derived from MODIS satellite mission products. Agricultural drought maps are produced from 2003 to 2015 after masking the vegetation cover. Year 2008 was found the most severe drought year during the study period, where drought covered 37% of the vegetated land. This part of the study demonstrated the capability of remote sensing in fulfilling the need of an early warning system for agricultural drought over such a data-scarce region. This study also aims to monitor hydrological drought. The Gravity Recovery and Climate Experiment (GRACE) satellite-derived monthly Terrestrial Water Storage (TWS) is the hydrological drought indicator, that is used to calculate the deficit. Severity of drought events are calculated by integrating monthly water deficit over the drought period. In addition, drought recovery time is assessed depending on the estimated deficit. Major drought events are classified into several levels of severity by applying a drought monograph approach. The results demonstrated that GRACE TWS is a reliable indicator for drought assessment over Iraq, and provides useful information for decision makers which can be utilized in developing drought adaptation and mitigation strategies.