In order to improve soil moisture and drought monitoring with remote sensing technology, on the basis of commonly used methods and soil thermodynamics, a new way of drought monitoring with EOS/MODIS data, the energy index method, is proposed. The outcome of application shows that the method performs well in soil moisture and drought monitoring, obviously superior to presently used methods. It is pointed out that drought prewarning should be base on soil moisture and remote-sensing drought monitoring measurements, as well as precipitation and temperature forecasts, which need to be converted into the corrected soil moisture and added into the resulting drought level according to the related standards.