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In this paper was study the wellbore instability caused by hydration of shale formation during drilling is a major problem in drilling engineering. A polyhydroxy-alkanolamine was synthesized, and the shale inhibition performance was evaluated by anti-swelling test, linear swelling test, wash-durable test and bentonite hydration and dispersion experiment. The shale inhibition mechanism of polyhydroxy-alkanolamine was studied by Fourier transform infrared spectroscopy (FTIR), particle size distribution, Zeta potential, Thermal analysis and Scanning electron microscopy (SEM). The main results show that the use of polyhydroxy-alkanolamine (EGP-2) can result in a relatively lower linear swelling rate of bentonite, and the linear swelling rate of 0.3% EGP-2 was 26.98%, which is stronger compared with 4% KCl. The anti-swelling rate of 0.3% EGP-2 was 43.54%, the shrinkage swelling rate of 0.3% EGP-2 was 34.62%. Results show that EGP-2 may permeate and adsorb on the bentonite surface. The rolling recovery rate of easily hydrated shale was high as 79.36%, which greatly reduces the dispersion ability of water to easily hydrated shale. The results of this study can be used to maintain the stability of the wellbore, which is conducive to related research.