Satellite-based precipitation monitoring at high spatial resolution is crucial for assessing the water and energy cycles at the global and regional scale. Based on the recently released 7th version of the Multi-satellite Precipitation Analysis (TMPA) product of the Tropical Rainfall Measuring Mission (TRMM), and the monthly precipitation data (3B43) are evaluated using observed monthly precipitation from 65 meteorological stations in Jiangsu Province, China, for the period 1998-2014. Additionally, the standardized precipitation index (SPI), which is derived by a nonparametric approach, is employed to investigate the suitability of the TRMM 3B43 precipitation data for drought monitoring in Jiangsu Province. The temporal correlations between observations and the TRMM 3B43 precipitation data show, in general, reasonable agreement for different time scales. However, in summer, only 50% of the stations present correlation coefficients that are statistically significant at the 95% confidence interval. The overall best agreement of TRMM 3B43 precipitation data at seasonal scale tends to occur in autumn (SON). The comparative analysis of the calculated SPI time series suggests that the accuracy of TRMM3B43 decreases with increasing time scale. Stations with significant correlation coefficients also become less spatially homogeneous with increasing time scale. In summary, the findings demonstrate that TRMM 3B43 precipitation data can be used for reliable short-term drought monitoring in Jiangsu province, while temporal-spatial limitations exist for longer time scales.