Building reservoirs is a response to cope with drought in drylands. However, this human modification to the landscape may trigger both positive and negative effects. Here, we investigate how a network of reservoirs influences the propagation of meteorological drought (MD) into hydrological drought (HD) in a large semi-arid catchment in Brazil. We applied 12-month standardized indices to classify droughts. Then, the drought series were compared to each other. The downstreamness concept was used to describe the spatial water distribution. The onset of reservoir drought (RD) was much later than MD, but the delay between MD and RD peaks was even longer. Streamflow drought started with a small delay after MD, but it transformed into a similar RD. RD was initially more severe downstream. When the drought severity was at its highest, upstream and downstream RD equalized. The perceptual model of drought propagation may help in developing reservoir management systems in drylands.