Drought events of increasing frequency, duration and intensity are expected to seriously affect the Mediterranean region in the following decades, and particularly its arid insular areas. In the Greek islands of the Aegean Archipelago, which are highly vulnerable to drought due to their specific natural, physical, and socio-economic conditions, significant water deficits are expected, which are likely to cause severe impacts on local economy and society. This paper aims to assess the drought vulnerability of the Aegean islands and to identify the potential contribution of supply enhancement options in vulnerability reduction. The proposed methodology is applied in the islands of Syros, Milos and Naxos, which were selected for their diverse water systems, combined with high population and tourism development. Proxy indicators were used to identify the underlying drought vulnerability factors, while an overall vulnerability index was estimated, to assess the anticipated contribution of water reuse options to drought vulnerability reduction.