Abstract: Considering the lack of agriculture drought index in China, Palmer moisture anomaly index is introduced. Taking example for Yan'an, theoretical formula and physical meaning of Palmer moisture anomaly index is described. Using the method, the monthly Palmer moisture anomaly indexes of twenty wheat observation stations, such as Yan'an, Wuwei, Jingtai, Xining, Guide, Lanzhou etc, from 1961 to 2000 are calculated in the east of Northwest China, and the aridity and wetness of different period of growth for wheat are evaluated. The calculation of Palmer moisture anomaly index values is based on a supply and demand model of the soil moisture at a location. In addition to the current precipitation, air temperature, available water holding capacity (C_WA), some factors derived from water balance equation are considered such as potential evapotranspiration, potential recharge, potential runoff, potential loss, surface soil moisture content, and underlying soil moisture content. Factors of several previous months are based on to establish each Palmer moisture anomaly index value. It shows that the method of Palmer moisture anomaly index is more reasonable to study the flood or drought of different period of wheat growth in the east of Northwest China. The extent of drought and flood event of different periods of wheat growth can't be objectively assessed by Z-index. The difference of years with same precipitation and different temperature and C_WA can't be distinguished. Palmer moisture anomaly index in comparison with others is a good indication of the severity and extent of flood/drought event and of more objective classification of them, which is therefore quite applicable to an extended area. All these show that Palmer moisture anomaly index is more objective than Z-index for analysis on aridity and wetness in different period of wheat growth, and more accords with the results of analysis on aridity and wetness of the wheat in different period of growth. Analysis shows that Palmer moisture anomaly index can be the analysis tool of agriculture aridity and wetness in semiarid and semi-wetness regions in the east of Northwest China.