The energy industry is exploring sustainable chemistry and engineering solutions for exploitation of shale reservoirs. Smectite-rich shale is challenging to drill with traditional water-based drilling fluid (WBDF). The objectives of this study are (i) to investigate acute toxicity of drilling fluids and (ii) to enhance the rheological properties, lubricity, and clay inhibition behavior of WBDF by adding Tween 80 (T80)/ZnO nanoparticles. Acute toxicity results revealed 100% survival rate of white leg shrimp in WBDF waste. At 0.7 g, the optimum concentration of T80ZnO, the plastic viscosity (PV) was improved by 12%; the negative surface charge of nanomaterial might have improved repulsion forces/stability and enhanced viscosity in the drilling fluids. Yield point (YP) was improved by 71%, moreover 10 min gel strength (GS) and 10 s GS were significantly increased by 32 and 54%, respectively. The metal oxide nanosolids induced heat transfer characteristics and ensured gelling and yield strength properties. Lubricity was slightly increased by 7%; the ZnO nanorods between the two sliding contact surfaces (i.e., assuming drill pipe and casing) improved lubricity. Filtrate loss (FL) volume was considerably minimized to 17 and 30% at API and high-pressure, high-temperature (HPHT) conditions, respectively; this observation could be explained by pores plugging in the filter paper. Heated clay swelling inhibition was optimized after addition of 0.6 g of T80ZnO nanoparticles to WBDF. The clay inhibition was enhanced by 9 and 17% when compared to conventional WBDF and fresh water, respectively; this progress might have attributed to the corresponding: (i) pores plugging in the clay and (ii) interparticle pores bridging between existing drilling additives and nanomaterial. The above findings identify that this drilling fluid could attain sustainable environmental and operational success while drilling into montmorillonite/smectite rich-clay and shale rock.