Small waterbodies are numerically dominant in many landscapes and provide several important ecosystem services, but automated measurement of waterbodies smaller than a standard Landsat pixel (0.09 ha) remains challenging. To further evaluate sub‐Landsat pixel techniques for estimating inundation extent of small waterbodies (basin area: 0.06–1.79 ha), we used a partial spectral unmixing method with matched filtering applied to September 1985–2018 Landsat 5 and eight imagery from southern Arizona, USA. We estimated trends in modeled surface water area each September and evaluated the ability of several common drought indices to explain variation in mean water area. Our methods accurately classified waterbodies as dry or inundated (Landsat 5: 91.3%; Landsat 8: 98.9%) and modeled and digitized surface water areas were strongly correlated (R² = 0.70–0.92; bias = −0.024 to −0.015 ha). Estimated surface water area was best explained by the 3‐month seasonal standardized precipitation index (SPI03; July‒September). We found a wide range of estimated relationships between drought indices (e.g. SPI vs. Palmer Drought Severity Index) and estimated water area, even for different durations of the same drought index (e.g. SPI01 vs. SPI12). Mean waterbody surface area decreased by ~14% from September 1985 to September 2018, which matches declines in local annual precipitation and regional trends of reduced inundation extent of larger waterbodies. These results emphasize the importance of understanding local systems when relying on drought indices to infer variation in past or future surface water dynamics. Several challenges remain before widespread application of sub‐pixel methods is feasible, but our results provide further evidence that partial spectral unmixing with matched filtering provides reliable measures of inundation extent of small waterbodies.