Abstract: The Tarim River basin, China, is a typical arid inland river basin in China. Management of water resources and agricultural development rely heavily on the understanding of droughts. In this study, an integrated drought index is proposed, based on the Standardized Precipitation Evapotranspiration Index and the Standardized Runoff Index, and then the changing properties of drought regimes have been analyzed using a Markov Chain model. Results indicate that: (1) the Kaidu and Aksu Rivers are dominated by prompt transition between hydrological and meteorological droughts. Long-lasting droughts heavily impact agricultural development in the Kaidu and Yarkand River basins; (2) the Kaidu and Aksu River basins are influenced mainly by hydro-meteorological droughts and hydrological drought is dominant in the Yarkand River basin; (3) different drought conditions are the results of different sources of river runoff. Increasing precipitation alleviate droughts in the Tarim River basin. However, a drying tendency can still be found in the Kaidu River basin; (4) higher probability is detected for the transition from both meteorological and hydrological wet to both meteorological and hydrological dry, implying that the Tarim River basin is sensitive to both meteorological and hydrological droughts. Results of this study are of practical value for the regional management of water resources, planning of agricultural irrigation, and measures for mitigation of hydrological and meteorological droughts.