Drought is a well-known and costly climate-related natural hazard. Unlike other climate-related natural hazards, droughts are usually long in duration and may cover a large region, the physical boundaries of areas affected by drought are sometimes arbitrary, and the impacts are sometimes difficult to identify. Climate records since 1895 show that drought has occurred periodically in Kentucky. The drought of 2007 was the most recent drought to affect Kentucky and is the primary focus of this research. The purpose of this research is to identify impacts of drought and potential vulnerabilities to various drought impact sectors in Kentucky so that policymakers can develop a drought plan that addresses these vulnerabilities and emphasizes mitigation efforts. An historical analysis of drought was provided for the following droughts that occurred in Kentucky: 1930-31, 1940-42, 1952-55, 1987-88, and 1999-2001. A more indepth analysis of the development and impacts of the drought of 2007 was conducted. Weekly drought reports from the drought of 2007 that were published by the Kentucky Division of Water were used for analysis.The reports discussed streamflows, PDSI values, precipitation deficits, lake levels reports from the U.S. Army Corps of Engineers, and other information that documented the progress of the drought. Impacts caused by the drought of 2007 were identified mostly through news reports. Agriculture and water supplies were determined to be most impacted by drought; therefore, two separate surveys (one regarding drought impacts on agriculture in 2007, the other regarding drought impacts on water supplies in 2007) were created to increase the understanding of how the drought of 2007 affected agriculture and water supplies in Kentucky. Other impacts from the drought of 2007 that were studied include impacts on recreation and tourism, the number of fires and wildland fires, plant and animal species, and small businesses. It was found that droughts that have affected Kentucky have originated in all directions and have spread northward, southward, eastward, and westward into Kentucky. The temporal scale of these droughts has also varied. Impacts caused by the drought of 2007 in Kentucky were very similar to impacts caused by historical droughts. However, the documentation of drought impacts that occur in Kentucky needs improvement. Agricultural impacts are documented better than any other impact, while impacts on water supplies, recreation and tourism, the occurrence of wildland fires, plant and animal species, and small businesses are not as well documented. It is recommended that conducting an extensive analysis of how various sectors are vulnerable to drought in Kentucky and educating the public on the importance of drought awareness should be addressed by policymakers involved in the development of Kentucky’s state drought plan.