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Peanut is a vital source of protein, particularly in the tropical regions of Asian and African countries. About three-quarters of peanut production occurs worldwide in arid and semi-arid regions, making drought an important concern in peanut production. In the US about two-thirds of peanuts are grown in non-irrigated lands, where drought accounts for 50 million USD loss each year. The looming threat of climate change exacerbates this situation by increasing erratic rainfall. Drought not only reduces yield but also degrades product quality. Peanuts under drought stress exhibit higher levels of pre-harvest aflatoxin contamination, a toxic fungal metabolite detrimental to both humans and animals. One way to sustain peanut production in drought-prone regions and address pre-harvest aflatoxin contamination is by developing drought-tolerant peanut cultivars, a process that can be accelerated by understanding the underlying physiological and genetic mechanisms for tolerance to drought stress. Different physiological attributes and genetic regions have been identified in drought-tolerant cultivars that help them cope with drought stress. The advent of precise genetic studies, artificial intelligence, high-throughput phenotyping, bioinformatics, and data science have significantly improved drought studies in peanuts. Yet, breeding peanuts for drought tolerance is often a challenge as it is a complex trait significantly affected by environmental conditions. Besides technological advancements, the success of drought-tolerant cultivar development also relies on the identification of suitable germplasm and the conservation of peanut genetic variation.