Satellite based evapotranspiration according to the energy balance principle has clear physical meaning, and is widely used in the field of remote sensing for drought monitoring. Based on the China Energy and Water Balance Monitoring System (CEWBMS) and long timeseries (11 years) dataset of geostationary satellite, the percentage of relative evapotranspiration anomaly (PRETA) is obtained by using FY2/VISSR remote sensing data and investigated for largearea drought monitoring. Compared with polarorbiting satellite based drought indices, the FY2 based PRETA drought index has obvious advantages in the scope and frequency of monitoring. Due to the introduction of anomaly to relative evapotranspiration, the drought intensity classification is no longer dependent on seasonal and regional variations. Continuous quantitative evaluations of drought conditions in Southwest China from autumn 2009 to spring 2010 are carried out and statistics of the arid area are collected. Results show that spatial and temporal changes of drought status derived from PRETA are highly correlated with the actual drought situations. Trends of the areaaveraged PRETA and the precipitation anomaly percentage timeseries are highly consistent. Meanwhile, PRETA has a reasonable correlation with 10 cm relative soil moisture measurements. On the whole, the drought monitoring application in this study provided a practical way for realtime, largearea, high spatial resolution, quantitative and dynamic monitoring of drought.