Locust plagues inflict severe agricultural damage. Climate change-induced extreme events like rainfall and droughts have expanded locust habitats. These new areas, often beyond routine monitoring, could become potential high-risk locust areas (PHRLA). Quantitatively understanding the outbreak mechanism driving drought and flood dynamics is crucial for identifying PHRLA, but such studies are scarce. To address this gap, we conducted a case study on locust outbreaks in Xiashan Reservoir, the largest reservoir in Shandong Province, China, in 2017 and 2018. Using time series satellite imagery and meteorological products, we quantitatively analyzed how drought–flood dynamics and temperature affect locust habitats, reproduction, and aggregation. Employing an object-oriented random forest classifier, we generated locust habitat classification maps with 93.77% average overall accuracy and Kappa coefficient of 0.90. Combined with meteorological analysis, we found that three consecutive drought years from 2014 to 2016 reduced the water surface area by 75%, expanding suitable habitats (primarily reeds and weeds) to cover 60% of the reservoir. Warm winters and high temperatures during locust key growth periods, coupled with expanding suitable habitats, promoted multi-generational locust reproduction. However, substantial flooding events in 2017 and 2018, driven by plentiful rainfall during key growth periods, reduced suitable habitats by approximately 54% and 29%, respectively. This compression led to high locust density, causing the locust plague and high-density spots of locusts (HDSL). Our study elucidates locust plague outbreak mechanisms under dynamic drought and flood environments. Based on this, we propose an approach to identify PHRLA by monitoring changes in drought and flood patterns around water bodies and variations in suitable habitat size and distribution, as well as surrounding topography. These findings hold significant implications for enhancing locust monitoring and early warning capabilities, reducing pesticide usage, and ensuring food and ecological security and sustainable agriculture.