Vegetation indices are used widely to monitor land condition. However, spatial or temporal variation in index values may result from many causes. Vegetation indices, therefore. provide little information about land condition unless they can be compared with an ecologically-defined reference value. For moisture-limited environments e define the reference condition as the one in which runoff losses and evaporation losses from the soil surface are negligible and plant available moisture approaches long-term precipitation. The corresponding vegetation index value is proposed as a reference for the assessment of dryland condition. We describe procedures to identify reference sites and to derive a regional function for the prediction of potential vegetation index values on the basis of satellite sensor imagery. digital elevation models and monthly climate records.