Abstract: Nano SiO₂ (silicon dioxide) is proposed to plug the nano sized pore throats in shale formation to retard invasion of filtrate into the formation in contact with drilling fluid, thus avoiding tight hole and borehole collapse. Effect of nano SiO₂ on the improvement of drilling fluid properties was evaluated by measuring the viscosity, filter loss of drilling fluid and shale swelling. The results showed that to improve the performance of the drilling fluid, the nano SiO₂ used should be resistant to salt contamination. Treatment of the drilling fluid with 1%-5% nano SiO₂ increased the viscosity of the fluid by increasing inter-particle friction. On the other hand, the nano SiO₂ was sensitive to the concentration of salt. Laboratory experiments at room temperature showed that by adding 3% nano SiO₂ into the drilling fluid, it will have the capacity of tolerating salt commination to 12%. Particles of the nano SiO₂ can deposite into the filter cake, reducing the filter loss of the drilling fluid (percent reduction of filter loss volume as high as 40.2%). By retarding the invasion of filtrate, nano SiO₂ improved the inhibitive capacity of the saltwater drilling fluid. Nano SiO₂ remarkably reduced the volume of filter loss of saltwater drilling fluid (salt concentration less than 8%).