Drought is the world's natural disaster that is the most widely distributed, most frequent, most long lasting, with the biggest impact and causing the worst economic losses. Among all the natural disasters, drought is also the one whose causes are the most complicated and least understood and whose monitoring is the most difficult. Indeed the drought monitoring is well known as a hard problem. Drought can happen at any time on any climate zone. Arid and semiarid regions are where drought occurs the most often. But a humid region with abundant rainfall can also have drought from a temporary climate change. As the regions changes, characteristics and patterns of drought may vary considerably. Its monitoring methods are also different. At present, drought monitoring throughout the world is primarily based on the indices from meteorological, hydrological, agricultural and satellite remote sensing data. The vegetation condition index (VCI) is one of the most widely used indices for satellite monitoring of drought. As shown by researches and operational applications, VCI is a good reflection of world wide drought condition. It has been used in routine drought monitoring by U.S. National Ocean and Atmosphere Administration (NOAA). Chinese National Satellite Meteorological Center also bases its monitoring service on VCI. Arid and semiarid areas in China are mostly distributed in the northwest part including Xinjiang, Gansu, Qinghai, Shannxi and Ningxia, as well as in Inner Mongolia. Here the precipitation is small and unstable, and the variability of precipitation is large. Drought occurs most frequently in these areas, serious affecting the human life and the economic development, and causes the deterioration of the already fragile ecology environment. In order to better understand the capability of the VCI in monitoring drought at different climate region in northwest China, this article chooses the above six provinces as study region, uses the NDVI data during the 22 years of 19822003 to calculate the monthly VCI in the study region, and analyses the relationship of VCI with the percentage precipitation anomalies at different climatic region during the 22 years. Our study shows that VCI reflects the occurring, development and distribution of drought quite well in space and time in most climate regions in northwest China, and thus serves as a good indicator for drought monitoring. However, in the arid and extremely arid areas, VCI has shown to be abnormally high and does not reflect the perennial drought condition in these areas. We found that this is caused by the extremely low rate of vegetation covering in these areas. Through the study of the NDVI characteristics, annual change and interannual change patterns of the various ecosystems in northwest China, improvement procedures are formulated and an improved vegetation condition index, called RVCI, is introduced. Through the monthly comparison between RVCI and VCI during the 22 years, it is shown that RVCI remarkably improves VCI to better reflect the perennial drought condition of the arid areas. 