Abstract Severe drought is the greatest recurring natural disaster to strike North America. A remarkable network of centuries-long annual tree-ring chronologies has now allowed for the reconstruction of past drought over North America covering the past 1000 or more years in most regions. These reconstructions reveal the occurrence of past “megadroughts” of unprecedented severity and duration, ones that have never been experienced by modern societies in North America. There is strong archaeological evidence for the destabilizing influence of these past droughts on advanced agricultural societies, examples that should resonate today given the increasing vulnerability of modern water-based systems to relatively short-term droughts. Understanding how these megadroughts develop and persist is a timely scientific problem. Very recently, climate models have succeeded in simulating all of the major droughts over North America from the Civil War to the severe 1998–2004 drought in the western U.S. These numerical experiments indicate the dominating importance of tropical Pacific Ocean sea surface temperatures (SSTs) in determining how much precipitation falls over large parts of North America. Of central importance to drought formation is the development of cool “La Niña-like” SSTs in the eastern tropical Pacific region. This development appears to be partially linked to changes in radiative forcing over that region, which affects the Bjerknes feedback mechanism of the ENSO cycle there. Paradoxically, warmer conditions over the tropical Pacific region lead to the development of cool La Niña-like SSTs there, which is drought inducing over North America. Whether or not this process will lead to a greater prevalence of drought in the future as the world warms due to accumulating greenhouse gases is unclear at this time.