Destablization and demulsification is a difficult task for the treatment of waste oil-in-water drilling fluid because of its "three-high" characteristics: emulsification, stabilization and oiliness. At present, China is short for effective treating technology, which restricts cleaner production in oilfield. This paper focused on technical difficulties of waste oil-in-water drilling fluid treatment in JiDong oilfield of China, adopting physical-chemical collaboration demulsification technology to deal with waste oil-in-water drilling fluid. After oil-water-solid three-phase separation, the oil recovery rate is up to 90% and the recycled oil can be reused for preparation of new drilling fluid. Meanwhile, harmless treatment of wastewater and sludge from waste oil-in-water drilling fluid after oil recycling was studied. The results showed that wastewater after treated was clean, contents of chemical oxygen demand and oil decreased from 993 mg/L and 21,800 mg/L to 89 mg/L and 3.6 mg/L respectively, which can meet the requirements of grade one of "The National Integrated Wastewater Discharge Standard" (GB8978); The pollutants in the sludge after harmless treatment are decreased below the national standard, which achieved the goal of resource recovery and harmless treatment on waste oil-in-water drilling fluid.