The seasonal cycle of the evaporative stress index (ESI) over Australia, and its relationship to observed rainfall and temperature, is examined. The ESI is defined as the standardized anomaly of the ratio of actual evapotranspiration to potential evapotranspiration, and as such, is a measure of vegetation moisture stress associated with agricultural or ecological drought. The ESI is computed using the daily output of version 6 of the Bureau of Meteorology’s landscape water balance model [Australian Water Resource Assessment Landscape (AWRA-L)] on a 5-km horizontal grid over a 45-yr period (1975–2019). Here we show that the ESI exhibits marked spatial and seasonal variability and can be used to accurately monitor drought across Australia, where ESI values less than negative one indicate drought. While the ESI is highly correlated with rainfall as expected, its relationship with temperature only becomes significant during the warmer seasons, suggesting a threshold above which temperature may affect vegetation stress. Our analysis also shows that the ESI tends to be strongly negative (i.e., indicating drought) during El Niño and positive phases of the Indian Ocean dipole (IOD), when conditions tend to be anomalously hot and dry. A negative phase of the southern annular mode also tends to drive negative ESI values during austral spring with a one-month delay.