Abstract Global warming is driving changes in atmospheric moisture seasonality and an increase in the frequency of prolonged precipitation anomalies. These anomalies are often assumed to be characterized by moisture sourced from oceanic evaporation, rather than being moderated by recycled terrestrial evapotranspiration. However, current indexes used to evaluate hydroclimatic anomalies, which exclude particle tracking, do not account for different precipitation moisture sources. Here, stable isotopes of hydrogen and oxygen are used to differentiate precipitation moisture sources, enabling a novel approach to tracking anomalous dry periods through an isotope‐based Evaporation and Moisture Recycling Index (iEMI). iEMI correlated evaporation‐sourced precipitation with prolonged dry periods for European droughts (2011–2013), the Cape Town South Africa ‘Day Zero drought’ (2015–2018) and the Australian Millennium drought (1997–2010). iEMI aligned best to anomalous precipitation events linked to the strength and phase of the El Niño Southern Oscillation across all sites and could be used for drought management interventions.