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Drought and vegetation dynamics in the northern Xinjiang Uygur Autonomous Region of China (NXC), the centre of Asia with arid climate, were assessed using the standardized precipitation evapotranspiration index (SPEI) and the normalized difference vegetation index (NDVI). Analyses were performed through the use of Sen’s method and Spearman’s correlation to investigate variations in the NDVI and the impacts of drought on vegetation from 1998 to 2015. The severity of droughts in the NXC was assessed by the SPEI, which was revealed to increase over the last 60 years at a rate of 0.017 per decade. This indicates that an alleviating tendency of drought intensity occurred in the NXC. Specifically, the spatial pattern of drought intensity increased gradually from the north-western to south-eastern regions. The average yearly NDVI was 0.28 and increased slightly by 0.001 yr−1 (r = 0.94, p = 3.64) between 1998 and 2015. Additionally, the NDVI showed an obviously spatial heterogeneity, with greater values in the west and small values in the east. Significantly, positive correlations between SPEI and NDVI were observed, while drought exerted a five-year lag effect on vegetation.