Lismore, like much of the Northern Rivers region, experiences significant year-to-year variability in rainfall patterns, which can lead to periodic droughts. This variability is often influenced by El Niño and La Niña events. El Niño tends to bring reduced rainfall, leading to dry conditions, as seen during 2002-2003 and 2007 when drought conditions were particularly pronounced. In contrast, La Niña brings increased rainfall, contributing to wetter conditions. However, the region generally experiences less drought compared to areas west of the Great Dividing Range, which are more prone to extended dry periods.

While droughts can affect the region, Lismore is relatively fortunate in its water security due to its access to the Rocky Creek Dam. Located about 20 km north of the city, within the Whian Whian State Conservation Area, the dam serves as the primary municipal water supply. This high-rainfall area provides a relatively reliable source of water, with additional water being drawn from the Wilsons River when necessary to meet demand.

To manage potential droughts, Rous County Council has implemented a Drought Management Plan, which includes water restrictions based on dam levels. For example, Level 1 water restrictions are triggered when the Rocky Creek Dam reaches 60% of its capacity, with Level 2 restrictions implemented at 45% capacity, and more severe restrictions as levels continue to fall.

Despite the challenges, Lismore has seen relatively few instances of severe water restrictions. Between 2002 and late 2019, only one severe Level 5 restriction was enforced in March 2003, with another Level 1 restriction occurring in the latter half of 2007. The region's proactive approach to managing water resources has helped mitigate the impact of droughts and ensures that water remains available for the community even during dry spells.

With the strategic management of local water supplies and ongoing efforts to monitor and adapt to changing climatic conditions, Lismore continues to maintain its water security in the face of potential drought risks.