Peanut (Arachis hypogaea L.) is one of the most important oilseed crops that are cultivated worldwide. Peanut production is now greatly limited by drought stress, which is a major environmental challenge. The urgent task for current peanut research is thus to study the underlying mechanisms of peanut drought tolerance, to identify genes that are closely associated with drought tolerance, and to create new germplasms/varieties with high drought tolerance. In this review, we summarize recent advances in the acclimation mechanisms to water deficiency and the genetic improvement of peanut for drought tolerance, and propose the perspectives for the future peanut research.