The insular Caribbean experiences numerous climate and environmental hazards, including but not limited to hurricanes, floods, earthquakes, volcanic eruption, and drought. While some hazards are well known, such as hurricanes, drought is considered one of the neglected hazards. This dissertation contributes to the understanding of three aspects of drought events in the region: the spatial and temporal effects of low-frequency atmospheric variability on drought, the role of topography and climate on Puerto Rico water resources, and a comparative study of the impact of climate change on crop water needs in an island in the Greater Antilles (Puerto Rico) and a Lesser Antilles (St. Croix). The results indicated that the Atlantic Meridional Mode (AMM) was most strongly related with drought events in the insular Caribbean, followed by the North Atlantic Oscillation (NAO), and Central Pacific El Nino Southern Oscillation (CP ENSO). However, CP ENSO was only related to drought in the Lesser Antilles (LA), while the relationship between the two types of ENSO and the Greater Antilles (GA) was not statistically significant. The LA was also the region with more intense, widespread, and frequent drought events during 1950–2017. Projections of water stress indicated that St. Croix, representative of smaller islands in the insular Caribbean, will suffer from water deficit and decline in agriculture suitability of sweet pepper, banana, and plantain for at least half of the year starting in the mid-21st Century. In Puerto Rico, representative of larger islands, it is the southern region that will have crop suitability most affected by climate change. Conversely, the reduction in net infiltration in south, north, and east Puerto Rico may affect both the tropical forest in the Luquillo Mountains as well as the recharge of the two most important aquifers in the island: North Coast and South Coast Aquifers. These findings should assist the islands to better prepare for the potential effects of climate variability and change on water management and food security.