Yunnan suffered from a severe drought from Winter, 2009 to Spring, 2010. Compared with traditional methods for drought monitoring, remote sensing (RS) based methods has the merits of almost real-time and large covering area. In this paper, vegetation water supply index (VWSI) was used to detect the drought condition utilizing Moderate Resolution Imaging Spectroradiometer (MODIS) data in Yunnan province on 7 March, 2010. Merits and pitfalls of this method were analyzed according to the comparison between the RS detected drought and the real drought status developed by the National Meteorological Bureau. Our results showed that VWSI was apt to agriculture fields with dense vegetation covered areas. This means that this method can be used to detect the drought in a regional area.