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A severe drought occurred in the region of Poyang Lake, the largest freshwater lake in China in early 2011, causing various environmental problems and posing a significant threat to local animals and humans. The event has caught extensive attention from many environmental groups as well as from national and international news media. Yet there has been no quantitative report on the severity of the drought except some qualitative description of water levels and local dry/wet conditions. Here we demonstrate how satellites can provide a quantitative measure of the severity of the large-scale drought, and how the current drought event may compare with historical conditions. The inclusion of the multi-source satellite data over a 12-year period also led to the conclusion that the drought was primarily caused by the significantly low precipitation. While there was a widespread rumor in China that the impoundment of the Three Gorges Dam (TGD) could lead to the severe drought, available data did not support such a hypothesis. Through this example, we hope to provide a perspective on the unique value of multi-source satellite data in quantifying environmental conditions in a changing climate.