During detailed coal exploration drilling in the extended area of Huacaotan Coal Mine, Shandan, Gansu, problems such as mud production, borehole expansion or shrinkage, caving and falling blocks in mudstone formation were often encountered. In light of the above problems, drilling fluid technology research was carried out. Materials as silicone inhibitor, filtrate reducer, plugging while drilling materials, and coating and flocculation materials were chosen for research on drilling fluid formulation and properties. Through indoor experiments and field applications, it has been proved that the drilling fluid has good inhibiting performance, anti caving and wall protection performance and rheological properties, and effectively solves the above technical problems. The service period of the drilling fluid is greatly increased; thus significantly reducing the discharge of waste drilling fluid, and fostering the application of the concept of green exploration in the exploration area.