Abstract: Borehole collapse had always been encountered when drilling the Shiqianfeng and Shihezi formations in Yanchang gas field. Laboratory study has been conducted to determine the mechanism governing the borehole wall instability. By measuring the geo-stress, mechanical characteristics of the rocks in formations where borehole collapse was encountered, mineral composition, and physic-chemical properties of the formations, it was found that the Shiqianfeng and Shihezi formations are composed of hard and brittle rocks, is capable of being dilatant at stresses that are far below the peak stress. Fluctuation of pressure forced the micro fractures near the wellbore to extend and converge, forming an instable high permeability zone. Study found that no high tectonic stress exists in Yanchang gas field, but formation reversion and fracture are quite developed. The formations drilled are in late diagenesis, and the mudstones have high clay content, making them moderate to strong swelling. Drilling fluid used in drilling these formations should have good inhibitive capacity. Low mud weight, less than the density equivalent of collapse pressure of formation, caused the formation to collapse. Long period of time for the borehole to be "empty" (with no drill tools in the hole) led to increasing collapse pressure of the formations, aggravating borehole collapse. Poor sealing and plugging ability of the drilling fluid, which cannot effectively seal and plug micro fractures on the borehole wall, was another cause of borehole collapse.