A color-coded early warning system is developed and proposed for drought management on the real-time reservoir operation. The system consists of three essential elements, namely, (1) drought watch, (2) water consumption measure, and (3) policy making. A new drought alert index is used to characterize the alert level of drought severity. For demonstration the drought warning procedures were effectively applied to a real-world two-parallel-reservoir region in northern Taiwan. The implementation of such a system proves that the decision support-like system can help the water authorities concerned take a timely action while confronting drought threats.