The influence of the Atlantic Multidecadal Oscillation (AMO) produces pronounced regional variability in drought over the Caribbean, Central America and equatorial South America area. Through spatial statistical analyses, we identified a marked dichotomy between drought values of the Standardized Precipitation Evapotranspiration Index (SPEI) in northern Mexico and equatorial South America as a function of the AMO. The relationship is such that significant negative correlations between the drought index and phase of the AMO are identified for northern Mexico and on the Atlantic side of Central America. This indicates that drought (negative values of the SPEI) episodes are linked to the positive phase of the AMO. Alternately, there are high positive correlations between the AMO and on the Pacific side of Central America, the Caribbean and mainly in the northern South American area closest to the equator. Although many potential causes have been proposed in explanation of precipitation variability over the region, this geographic dichotomy suggests that movement of the Intertropical Convergence Zone (ITCZ) may play a significance role. The heightened vulnerability of the developing nations in this region to drought episodes makes forecasting droughts of great importance. These nations are greatly dependent on water intensive industries to maintain economic development. Thus, the findings of this research can assist in informing drought preparedness strategies to mitigate significant losses due to drought.