China is frequently subjected to local and regional drought disasters, and thus, drought monitoring is vital. Drought assessments based on available surface soil moisture (SM) can account for soil water deficit directly. Microwave remote sensing techniques enable the estimation of global SM with a high temporal resolution. At present, the evaluation of Soil Moisture Active Passive (SMAP) SM products is inadequate, and L-band microwave data have not been applied to agricultural drought monitoring throughout China. In this study, first, we provide a pivotal evaluation of the SMAP L3 radiometer-derived SM product using in situ observation data throughout China, to assist in subsequent drought assessment, and then the SMAP-Derived Soil Water Deficit Index (SWDI-SMAP) is compared with the atmospheric water deficit (AWD) and vegetation health index (VHI). It is found that the SMAP can obtain SM with relatively high accuracy and the SWDI-SMAP has a good overall performance on drought monitoring. Relatively good performance of SWDI-SMAP is shown, except in some mountain regions; the SWDI-SMAP generally performs better in the north than in the south for less dry bias, although better performance of SMAP SM based on the R is shown in the south than in the north; differences between the SWDI-SMAP and VHI are mainly shown in areas without vegetation or those containing drought-resistant plants. In summary, the SWDI-SMAP shows great application potential in drought monitoring.