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Rural towns are especially susceptible to the effects of drought because their economies are dependent on natural resources. However, they are also resilient in many ways to natural hazards because they are rich in civic engagement and social capital. Because of the diverse nature of drought’s impacts, understanding its complex dynamics and its effects requires a multidisciplinary approach. To study these dynamics, this research combines appreciative inquiry, the Community Capitals Framework, and a range of climatological monitoring data to assess the 2012–14 Great Plains drought’s effect on McCook, Nebraska. Community coping measures, such as water-use reduction and public health programs, were designed to address the immediate effects of heat and scant rainfall during the initial summer and the subsequent years. Residents generally reported the community was better prepared than in previous droughts, including the persistent multiyear early-2000s drought. However, the results highlight wide variation in community perspectives about the drought’s severity and impacts, as well as divergent experiences and coping responses. Despite these factors, we find evidence of the transformative potential of moving from drought coping to drought mitigation. We attribute the city’s resilience to the ability to draw upon prior experience with droughts, having a formal municipal plan, and strong human and social capital to coordinate individual knowledge and expertise across agencies. We suggest that droughts have served a catalytic function, prompting the community to transform land-use practices, water conservation planning, and built infrastructure in lasting ways.