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Recent events across many regions around the world have shown that short-term droughts (i.e., daily or weekly) with sudden occurrence can lead to huge losses to a wide array of environmental and societal sectors. However, the most commonly used drought indices can only identify drought at the monthly scale. Here, we introduced a daily scale drought index, that is, the standardized antecedent precipitation evapotranspiration index (SAPEI) that utilizes precipitation and potential evapotranspiration and also considers the effect of early water balance on dry/wet conditions on the current day. The robustness of SAPEI is first assessed through comparison with two typical monthly indices [Palmer drought severity index (PDSI) and standardized precipitation evapotranspiration index (SPEI)] and soil moisture, and then applied to tracking short-term droughts during 1961–2015 for the Pearl River basin in south China. It is demonstrated that SAPEI performs as well as SPEI/self-calibrating PDSI at the monthly scale but outperforms SPEI at the weekly scale. Moreover, SAPEI is capable of revealing daily drought conditions, fairly consistent with soil moisture changes. Results also show that many of the historical short-term droughts over the Pearl River basin have multiple peaks in terms of severity, affected area, and intensity. The daily scale SAPEI provides an effective way of exploring drought initiation, development, and decay, which could be conducive for decision-makers and stakeholders to make early and timely warnings.