The study was aimed at identifying key factors that enhance resilience to prolonged dry spells and droughts among smallholder farmers in Chipoka Extension Planning Area (EPA) in the lakeshore district of Salima. The study area was selected because it experiences dry spells on a regular basis. The major contribution of this study is the construction of the Drought Resilience Index (DRI), which was used as a measure of drought resilience, and its use to determine the effect of resilience on the welfare of the farming families. Realising that smallholder farmers are not passive but active in responding to events that threaten their livelihoods, the study was aimed at identifying how factors such as household assets, social capital, size of land held by the farming household, among other factors help the farmers to absorb effects resulting from the effects of prolonged dry spells and droughts. The analytical framework used in the study assumed that resilience of a given household at a given time depends primarily on the options available to that household for making a living, which in turn affect the response of the household to adverse occurrences. Households whose options are stable and have a high adaptive capacity are said to be more resilient than those whose options are unstable and have less adaptive capacity. The study used principal component analysis (PCA) to reduce changes in actual household consumption and the number of months a household remains with food in normal and drought years to come up with the drought resilience index (DRI). To capture the effect of drought on farmers’ welfare, a stochastic frontier production function was estimated with output as the dependent variable and the drought resilience index among the explanatory variables. Results of the study reveal that most households in Chipoka were not resilient to effects of dry spells and that factors such as age of the household head, size of the farm family, land holding size, number of immediate family members living outside the household are vi some of the factors that affect the resilience of farming households. The study also found that households that were resilient to dry spells were likely to have improved farm household welfare. The study recommends promotion of productivity enhancing technologies. Another recommendation calls for promotion of drought resistant crops and diversification into off-farm economic activities. For state and non-state actors working in the study area, a recommendation is made that they must target their aid efficiently to achieve the intended purpose in enhancing resilience.