Numerous drought index assessment methods have been developed to investigate droughts. This study proposes a more comprehensive assessment method integrating two drought indices. The Standardized Precipitation Index (SPI) and the Streamflow Drought Index (SDI) are employed to establish an integrated drought assessment method to study the trends and characteristics of droughts in southern Taiwan. The overall SPI and SDI values and the spatial and temporal distributions of droughts within a given year (November to October) revealed consistent general trends. Major droughts occurred in the periods of 1979–1980, 1992–1993, 1994–1995, and 2001–2003. According to the results of the Mann–Kendall trend test and the Theil–Sen estimator analysis, the streamflow data from the Sandimen gauging station in the Ailiao River Basin showed a 30% decrease, suggesting increasing aridity between 1964 and 2003. Hence, in terms of water resources management, special attention should be given to the Ailiao River Basin. The integrated analysis showed different types of droughts occurring in different seasons, and the results are in good agreement with the climatic characteristics of southern Taiwan. This study suggests that droughts cannot be explained fully by the application of a single drought index. Integrated analysis using multiple indices is required.