Abstract: Under extreme drought conditions, the available water volume from regional sources declines sharply, while the drought-relief water-supply tasks assigned to major reservoirs increase rapidly. Conventional reservoir operation rules cannot satisfy these heightened and rapidly changing demands, leading to limited effectiveness of drought - response operations and a reduced capacity to buffer severe water-supply shortages across sectors. This study adopts a demand-oriented perspective to distinguish between normal and extreme drought scenarios and develops a graded drought-limited water level (DLWL) determination and dynamic control method that accounts for both historical supply-demand patterns and abrupt surges in water demand during extreme events. The method comprises three primary steps: (1) defining supply-demand boundaries for different drought scenarios using characteristic water-use patterns and long-term hydrological statistics, (2) calculating regular and special DLWLs that represent minimum storage thresholds needed to satisfy normal and extreme drought demand conditions, respectively, and (3) formulating dynamic control rules that enable switching between the regular and special DLWLs according to drought severity, reservoir storage evolution, and projected demand surges. A case study was conducted for Wangkuai and Xidayang reservoirs and the Shahe and Tanghe irrigation districts in Hebei Province. The regular-special DLWL was calculated and a dynamically switchable graded DLWL control strategy was developed to guide drought-response operations. Under this strategy, the regular DLWL mode was applied in normal drought conditions to ensure water supply for urban domestic use, agricultural irrigation, and ecological baseflow, whereas the special DLWL mode was activated under extreme drought conditions to prioritize urban domestic water supply while moderately restricting agricultural irrigation and further limiting ecological water use. Three scheduling schemes (the current scheme, a fixed regular-DLWL scheme, and the proposed regular-special DLWL scheme) were implemented for comparative analysis. The evaluation focused on extremely dry years and typical multi-year consecutive dry periods. Results indicate that applying the regular-special DLWL scheme substantially mitigated shortages in extremely dry years: total water shortages in the Shahe and Tanghe irrigation districts decreased by 66.53 million m³ and 32.45 million m³, respectively. During typical consecutive dry years, earlier strategic storage triggered by the special DLWL markedly improved water supply guarantee rate during several severely impacted periods, increasing from below 10% to approximately 90% and 50%, respectively. Over the multi-year droughts, irrigation shortages in the two districts declined by 186.20 million m³ and 182.74 million m³, respectively, and the number of months with severe shortage decreased by 7 and 32 months, effectively alleviating deficits in critical sectors and reducing the frequency and duration of acute water-stress episodes. Moreover, the proposed approach more effectively transforms the extreme shortage process into a wider and shallower shortage pattern. This transition reduces the incidence of high-intensity shortage episodes, lowers the risk of severe shortages, and improves the guarantee rate for agricultural irrigation. The research results can provide scientific support for reservoir drought resistance decision-making and emergency management under extreme drought conditions.