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Purpose – The purpose of this paper is to investigate the patterns and trends of drought incidence in north east highlands of Ethiopia using monthly rainfall record for the period 1984-2014. Design/methodology/approach – Standard precipitation index and Mann – Kendal test were used to analyze drought incident and trends of drought occurrences, respectively. The spatial extent of droughts in the study area has been interpolated by inverse distance weighted method using the spatial analyst tool of ArcGIS. Findings – Most of the studied stations experienced drought episodes in 1984, 1987/1988, 1992/1993, 1999, 2003/2004 and 2007/2008 which were among the worst drought years in the history of Ethiopia. The year 1984 was the most drastic and distinct-wide extreme drought episode in all studied stations. The Mann–Kendal test shows an increasing tendencies of drought at three-month (spring) timescale at all stations though significant (p < 0.05) only at Mekaneselam and decreasing tendencies at three-month (summer) and 12-month timescales at all stations. The frequency of total drought was the highest in central and north parts of the region in all study seasons. Originality/value – This detail drought characterization can be used as bench mark to take comprehensive drought management measures such as early warning system, preparation and contingency planning, climate change adaptation programs.