This study spatio-temporally analyzes the climatic variability and assesses drought in Khyber Pakhtunkhwa, Pakistan. The temperature and rainfall data were collected from Pakistan Meteorology Department (PMD) for a period from 1971 to 2018, whereas potential evapotranspiration was calculated applying Thornthwaite methodology. The variability in rainfall and temperature was spatially analyzed in GIS environment, whereas for trend detection, the Mann–Kendall approach has been applied. The Reconnaissance Drought Index (RDI) has been used for assessing drought assessment in Khyber Pakhtunkhwa, Pakistan. After applying the RDI, four drought phases were detected in the study area. The most severe drought span was during 1998–2002. Additionally, during the last 3 years (2015–2018), severe to extreme drought period was recorded at the majority of meteorological stations. The frequency of dry years varies from 8 to 3% at Balakot to 22.9% at Drosh meteorological station. The analysis further reveals that the increasing drought trend has been recorded at Kalam, Pattan, Balakot, and Kakul meteorological stations. The increasing drought at higher altitudes is because of a decrease in the amount of precipitation and an increase in temperature, which is an intimation of increasing risk to available water resources (glaciers) in this region and it will ultimately increase the issue of water scarcity in Pakistan.