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Summary In recent years, the Poyang Lake basin is in a prolonged drought which has placed immense pressure on the water resources utilization. In this paper, we explore the spatial and temporal distributions of extreme droughts in the Poyang Lake basin by using the methods of SPI (Standardized Precipitation Index) and EOF (Empirical Orthogonal Function) for the period of 1956–2009, which are influenced by regional precipitation anomalies and river–lake interaction due to water impounding of the Three Gorges Dam (TGD). The results show that: (1) the Poyang Lake basin experienced six extreme droughts during the past 60 years, which lead to decreases in streamflow from five tributary rivers down to the Poyang Lake. The droughts in the 1960s and the 2000s were the most serious ones. However, there was an increasing trend of streamflow in the upper and middle Yangtze in the 1960s, and a decreasing trend appeared in the 2000s. The decline of streamflow in the upper Yangtze reaches has lowered the water level of lower Yangtze River which has caused more outflow from the Poyang Lake to the Yangtze River; (2) the operation of the Three Gorges Dam (TGD) has altered the seasonal pattern of flow regimes in the Poyang Lake and significantly reduced the water level in the lower Yangtze River during the TGD impounding period from late September to early November; and (3) the conjunction of extreme droughts in the Poyang Lake and the upper Yangtze reaches coincided with the impounding of the TGD is the main cause of the low water level in the Poyang Lake. Although the impact of the recent droughts in the Poyang Lake and upper Yangtze reaches has played a crucial role in the low water level of Poyang Lake, more attention should be paid to its sensitivity to the influence of the large dam-induced changes in the interaction between river and lake, particularly during impounding periods. [ABSTRACT FROM AUTHOR]