Advances in remote sensing of the past ten years, contributed to the development of comprehensive drought monitoring system and numerous applications, which helped to make decisions for monitoring the environment and predicting sustainable socioeconomic activities. This paper discusses satellite-based land-surface observing system, which is based on assessment of vegetation health indices (VHI) derived from radiances observed by the Advanced Very High Resolution Radiometer (AVHRR) flown on NOAA operational polar-orbiting satellites. VHI have global coverage (75N and 55S) with resolution: spatial 4 km and temporal 7-day composit. The archive of VHI data cover the period 1981 through current and includes raw and calibrated radiances in the visible (VIS), near infrared (NIR) and infrared (IR) spectral bands. These radiances were post-launch calibrated and processed to eliminate high frequency noise The VIS and NIR radiances were used to calculate the Normalized difference vegetation index (NDVI) and IR radiances were converted to brightness temperature (BT). The 1981-2006 NDVI and BT archive were used to develop their climatology and calculate VHI. During the last eight years 4-km resolution VHI were used operationally for estimation of drought, moisture and thermal conditions, vegetation health, vegetation fraction, fire risk etc and presented at the NOAA/NESDIS web site (http://orbit-net.nesdis.noaa.gov/crad/sat/surf/vci/). Drought assessments were compared with ground observations in twenty two countries around the world and showed good results in early drought detection and monitoring its development and impacts. Besides VHI-based drought indices were used for assessment of biomass/crop production losses, fire risk mosquito-born epidemics, amount of water required for irrigation, and predicting ENSO impacts on productivity of land ecosystems. In the past five years, users around the world used drought and VHI information addressing different issues of drought impacts on socioeconomic activities. This presentation, in addition to the technique description, will be illustrated by many examples of applications to agriculture, forestry, weather models, climate, and land cover/land use activities.