Current experience shows, it is often impossible to fulfill certain functional tasks that are essential in challenging drilling and production environments using conventional macro and micro type fluid additives due to their inadequate physical, mechanical, chemical, thermal and environmental characteristics. Hence, the industry is looking for physically small, chemically and thermally stable, biologically degradable, environmentally benign chemicals, polymers or natural products for designing smart fluids to use virtually in all areas of oil and gas exploration and exploitation. Due to totally different and highly enhanced physio-chemical, electrical, thermal, hydrodynamic properties and interaction potential of nanomaterials compared to their parent materials, the nanos are considered to be the most promising material of choice for smart fluid design for oil and gas field application. This paper describes the formulation and preliminary test results of several nano-based drilling fluids. The recently developed nano-based fluids were formulated using a blend of nanos and nanostabiliser to study the rheological and filtration properties and evaluate its suitability for oil and gas field application. Initial mud formulation indicates that development of a functionally viable, physically stable and homogeneous and also long lasting nano-based drilling mud is difficult using water or salt water as the fluid phase. However, use of a suitable viscosifier at a right concentration and adoption of a special preparation method lead to the formulation of a nano-based drilling mud with desirable rheological and filtration properties along with the gelling behavior and mudcake quality. Initial test results indicate that the newly developed nano-based drilling mud produces suitable high and low end rheological properties including gelling characteristics and thus expected to fulfill its functional task during drilling and after cessation of drilling.