This study examines the duration and severity of droughts by the use of stochastic process considerations. The key annual flow statistics are used to estimate the related statistics of drought probability distributions for various combinations of return period and water demand. This study efforts initially focused on analyzing all the nation streamgage records that were judged to meet certain selection criteria, including those of record length, record quality. These analyses resulted in the determination of those annual flow statistics necessary to define the behavior of drought sequences for the selected streams. Using prior research results, the actual or estimated flow statistics are related to the probability distributions of maximum drought events, through the application of the theory of runs. This has resulted in assigning return periods to drought events at gaged locations, and permits an assessment of the probabilities of observed historical drought within the nation.