Climatological events over the past two decades have prompted the Caribbean Institute for Meteorology and Hydrology (CIMH) to pay closer attention to drought in the region. drought, on some occasions related to the ENSO phenomenon, has resulted in great losses, particularly in the agriculture industry and disruption of domestic water supplies. It is anticipated, that due to climate change, these events will become more frequent in the future. One way to deal with the impacts of climate variability and change and the uncertainty surrounding these is to establish monitoring and early warning systems for extreme events like drought in vulnerable communities to monitor trends. Such important information enables governments and communities to plan for and respond effectively to the challenges of climate-related events. To this end, CIMH has teamed with the Brace Centre, McGill University under the Caribbean Water Initiative (CARIWIN) project to initiate the Caribbean drought and Precipitation Monitoring Network (CDPMN). A number of precipitation indices and other indicators are being investigated to monitor drought the Caribbean. These indices also provide information on periods of above normal rainfall, allowing the monitoring of both extremes – drought and flood. Combined with the Precipitation Outlook currently produced by CIMH, drought and precipitation projections can also be made for up to at least three months. The CDPMN will also afford an opportunity for a participatory process, between CIMH, national and local governments and pilot communities, to propose new Community Water Strategies which consider the extremes of drought and flood for water resource management in jamaica, grenada and guyana.