Drought causes decline in bio-productivity, affects livelihoods and threatens food security. However, it has been observed that access to assets (such as natural capital) and diversification of livelihood help in ameliorating drought risk. The aim of this paper is to examine the contributions of ownership of assets and livelihood diversification in the overall adaptation to drought of farming communities in Bungudu, Dange, Dawakin-Tofa and Rimi in Northwestern Nigeria. A multi-stage sampling adopted by this study led to the selection of four localities and eighty smallholder farmer households. The research used indicators for measuring adaptive capacity to construct an adaptive capacity index. The values of the indicators were normalized. All the normalized scores lie between -1 and 0. Then scorecard method was used to compare and rank contributions of ownership of assets and livelihood diversification to the adaptation to drought of the four communities. The Adaptation Index generated has shown that Dawakin-Tofa with scores the highest score (43.5) has been ranked 1st is among the communities with highest ownership of small ruminants and is the most adaptive among the four communities. The findings of this study have corroborated work that shown that low adaptation to drought is associated with among other things lacking of livestocks (including small ruminants). It is concluded that ownership of small ruminants scored highest and has been ranked 1st in its contribution to adaptation to drought in ¾ communities of the study area. The recommendations of this study are geared towards enhancing sustainable livelihood of the communities.