Understanding climatic impacts is important if we are to comprehend the relationship between climate and society. Weather phenomena can have environmental, economical, and social impacts. Drought is the natural hazard that affects people the most. It is also the most complex and least understood. There is no one universally accepted definition for drought which makes its examination difficult. Droughts’ duration is also difficult to determine because it has no clearly defined onset and end. Also, drought varies both geographically and temporally making uniform drought monitoring difficult. Since drought is difficult to monitor and access, drought impacts are often poorly documented. The purpose of this research was to quantify (in dollars) the impacts of drought on Kentucky’s agriculture. Drought has been recorded historically in Kentucky since the late 1800s. According to the Kentucky Climate Center, the most significant drought years occurred in 1930-31, 1940-42, and 1952-55. Analyses of these years are included as well as the most recent significant drought years in 1987-88, 1999- 2000 and 2007. Four of Kentucky’s important commodities, including corn, soybeans, hay, and beef cattle, were examined during the significant drought years. The total state revenue for these commodities was analyzed during severe drought years vs. non-severe drought years. The result of this research identified how much of a deficit severe drought causes on Kentucky revenue for each of these commodities. This research is important to the general public as well as planners and policy makers. Proper documentation of drought impacts will help identify drought vulnerabilities and result in better risk management and mitigation. Key Words: Drought, Agriculture, Impact Assessment