This study focused on the trends of rainfall variability and drought monitoring in the northern region of Pakistan (Gilgit-Baltistan). Climate Hazards Group Infrared Precipitation with Stations (CHIRPS) model data were used for the period of 1981 to 2020. The Standardized Precipitation Index (SPI) was applied to assess the dry and wet conditions during the study period. The Mann–Kendall (MK) and Spearman’s rho (SR) trend tests were applied to calculate the trend of drought. A coupled model intercomparison project–global circulation model (CMIP5–GCMs) was used to project the future precipitation in Gilgit-Baltistan (GB) for the 21st century using a multimodel ensemble (MME) technique for representative concentration pathway (RCP) 4.5 and RCP 8.5. From the results, the extreme drought situations were observed in the 12-month SPI series in 1982 in the Diamir, Ghizer, and Gilgit districts, while severe drought in 1982–1983 was observed in Astore, Ghizer, Gilgit, Hunza-Nagar, and Skardu. Similarly, in 2000–2001 severe drought prevailed in Diamir, Ghanche, and Skardu. The results of MK and SR indicate a significant increasing trend of rainfall in the study area, which is showing the conversion of snowfall to rainfall due to climate warming. The future precipitation projections depicted an increase of 4% for the 21st century as compared with the baseline period in the GB region. The results of the midcentury projections depicted an increase in precipitation of about 13%, while future projections for the latter half of the century recorded a decrease in precipitation (about 9%) for both RCPs, which can cause flooding in midcentury and drought in the latter half of the century. The study area is the host of the major glaciers in Pakistan from where the Indus River receives its major tributaries. The area and volume of these glaciers are decreasing due to warming impacts of climate change. Therefore, this study is useful for proper water resource management to cope up with water scarcity in the future.