Drought impacts not only nature, but also the socioeconomic system and results from the imbalance of water supply and demand. It is necessary to estimate the ability of drought mitigation on the basis of water allocation. In this research, the drought mitigation ability index (DMAI) was constructed by the ratio of theoretical water supply and demand obtained from the optimal water allocation. Then, the DMAI was applied to Daqinghe watershed for temporal-spatial validation compared with the agricultural affected areas and the distribution of groundwater overexploitation. In addition, the historical (1961–2010) and future (2020) DMAI in Daqinghe watershed were analyzed. The results show that DMAI can overall represent the temporal-spatial characteristics of the drought mitigation ability. Furthermore, the DMAI of Daqinghe watershed is significantly decreased in the last 50 years, and groundwater resources play a prominent role in drought mitigation. Although the water from the South-to-North Water Transfer Project (SNWTP) can improve DMAI of Daqinghe watershed, the drought risk continues to be serious in the future.