Evapotranspiration is the single most important mechanism of mass and energy exchange between atmosphere, biosphere, and hydrosphere. Among the common approaches to estimating evapotranspiration, the complementary relationship has been the subject of many recent studies given its simplicity and the use of meteorological data only. Recently, a modified version of the complementary relationship, Modified GG, was developed using meteorological data only and had been successfully applied at 34 diverse global sites to provide more accurate information of evapotranspiration. However, the complementary relationship including Modified GG showed weak performance under dry conditions. This dissertation addressed this limitation of the complementary relationship using the Budyko hypothesis and extended its application to drought monitoring. between ET and potential ET (ETP) has been the subject of many studies because it uses only meteorological data as inputs. However, there is an increasing concern that some complementary relationship models perform poorly under dry conditions. To overcome this limitation, this dissertation was designed to extend the latest complementary relationship model, Modified GG, using both meteorological data and vegetation information, NDVI, which is readily available from remote sensing data. The proposed model, Adjusted GG-NDVI, was validated by comparing to other ET models and measured ET data. With Adjusted GG-NDVI, this dissertation addressed the applicability of using ET as a proxy for drought monitoring. As a result, the drought patterns from the proposed drought index, EWDI, were consistent with commonly used USDM in the United States. More importantly, this study described drought conditions by comprehensively considering both precipitation and vegetation conditions. Taken together, these findings have significant implications for the understanding of how ET can assist in water resources management.