Understanding the effects of droughts on vegetation and ecosystem services (ES) is important for climate change adaptation. However, drought occurrence varies across space and time. We examined drought dynamics and impacts on vegetation and ES in the semi-arid Limpopo Basin of Botswana. Weather station precipitation, remotely sensed normalized difference vegetation index (NDVI) and participatory mapping exercises provided data for the analyses. Results show that between 1980 and 2015, rainfall anomaly indices of potential drought years ranged between −4.38 and −0.12. The longest spell of below-average rainfall occurred between 1992 and 1996. On average, drought events lasted for 1.9 years and recurred every 2.3 years. Although the overall drought frequency was 3.7 times in every 5 years, drought prevalence increased to 50%, 60% and 70% between 1981–1990, 1991–2000, and 2001–2010, respectively. The wet season average vegetation condition index between 2000 and 2015 revealed the occurrence of severe-to-extreme droughts in 2002–2003, 2005, 2008–2009 and 2012–2013 and light-to-moderate droughts in 2004, 2006–2007 and 2011, giving a drought prevalence of 73.3%. The increased frequency and severity of droughts is diminishing natural vegetation, crop productivity and several provisioning ES through moisture stress and drought-induced agricultural expansions. There exists an urgent need for smallholder irrigation development in Bobirwa sub-district to improve crop productivity and reduce the drought-induced conversion of woodlands to agriculture.