The interface of freshwater and saltwater plays an important role in the economic and social dynamics along the coast and estuaries. Droughts in coastal areas have ecological impacts and affect socioeconomic dynamics and public health. In this study, we developed a bivariate and multivariate drought index that can quantify and indicate drought conditions in coastal, bay, and estuarine areas by integrating the meteorological and hydrological drought variables. The bivariate coastal drought index (BCDI) was developed using copula theory, which includes streamflow and salinity levels in the bay areas. Further, the entropy-weighted Euclidean distance method was used to develop the multivariate coastal drought (MCDI) index using precipitation, salinity, and streamflow datasets. Both the BCDI and MCDI were able to capture the major drought events occurring in the southeast region (2000, 2007, and 2011-2012) of the United States. Correlation analysis showed that both the BCDI and MCDI were highly correlated with the standardized univariate drought indices. One of the better features of the MCDI was that it was able to capture the dynamics and trends of the variables involved and, thus, was a better indicator of droughts in the coastal regions. Hit rates and false alarm ratios showed that both the indices were able to capture the droughts in coastal regions. The coastal drought indices developed in the study can be used by the National Integrated Drought Information System (NIDIS) and other agencies as drought indicators for coastal regions, along the coastal regions, estuaries, and bays in the United States. © 2020 American Society of Civil Engineers.