Drought is one of the most complex and challenging disasters that make Ethiopia highly vulnerable to its impacts. Recurrent droughts continue to threaten fragile livelihoods, which rely heavily on the highly climate-sensitive agriculture sector. North Wollo administrative zone is one of the areas extremely affected by persistent droughts, exposing the population to starvation and immense anguish. Thus, the main objective of this study was to assess the perceived risks of agro-meteorological drought recurrence and examine the livelihood vulnerability of the farming community with apparent resiliency contexts in North Wollo. The Climate Hazards Group InfraRed Precipitation with Stations (CHIRPS) rainfall, and Moderate Resolution Imaging Spectroradiometer (MODIS) datasets supplemented by the household survey, focus group discussion, and key informant interview were the data sources used. Z Score index (ZSI) was computed from the CHIRPS rainfall to depict meteorological droughts during the summer season (2000–2019). Mann-Kendal (MK) test was applied to analyze the seasonal and annual rainfall trends, and Sen’s slope estimator was used to fix the magnitude of change. Two MODIS datasets (MOD13Q1 and MOD11A2) were used to generate the Normalized Difference Vegetation Index (NDVI) and Land surface temperature. Accordingly, NDVI anomaly, Vegetation Condition Index (VCI), Temperature Condition Index (TCI), and Vegetation Health Index (VHI) were computed to detect and characterize agricultural droughts during the crop growing seasons. For the agricultural livelihood vulnerability analysis, principal component analysis (PCA) was used to prioritize the indicators and assign weights. As a result, 32 of the 66 indicators were selected and used to measure the agricultural system's exposure, sensitivity, and adaptive capacity. Both the livelihood vulnerability framework (LVI) and livelihood vulnerability sourcebook (LVIVSBA) approaches were employed to assess the vulnerability of households. Furthermore, PCA and multiple linear regression model were employed to analyze households’ resiliency to drought impacts. The Livelihood Resilience Index (LRI), framed on absorptive, adaptive, and transformative capacities, was used to quantify the households’ livelihood resilience. The results of the MK test revealed an increasing trend of annual rainfall (0.24–10.7 mm/year) observed in many districts, while it decreased (- 0.43 to -3.85 mm/year) in the summer season. All the meteorological and agricultural drought indices confirmed that 2002, 2004, 2009, 10, 2011, and 2015 were under a rainfall deficit with extreme drought events. The aggregated drought frequency of the agricultural drought indices indicated that 73.7% of the area was under high levels of drought occurrence, while 13.5, and 12.8% of the area was under moderate and extremely high levels of occurrence, respectively. In frequency, more meteorological droughts have been observed (15–18 times) than agricultural droughts (0–19) within the study period. The results of livelihood vulnerability analysis revealed that the study area was characterized by higher exposure (0.653) and sensitivity (0.632) and a lower adaptive capacity (0.37). Among the livelihood zones, North Wollo highland belg (NWHB) is characterized by the highest vulnerability score (0.681/0.715), followed by North Wollo east plain (NWEP) (0.634/0.619), while Abay Tekeze watershed (ATW) revealed the lowest (0.583/0.555) for LVI and LVIVSBA, respectively. Similarly, the poor (0.671/0.670), medium (0.589/0.593), and better-off (0.554/0.537) were relatively ordered from the highest to the lowest. On the other hand, the results of livelihood resilience indicated that about 57% of the surveyed respondents were non-resilient, while the remaining 43% were resilient. Of all the livelihood zones, ATW exhibited the highest proportion of resilient households (57.4%), while NWHB had the lowest (22.7%). Higher resilience in ATW was