Shale hydration dispersion and swelling are primary causes of wellbore instability in oil and gas reservoir exploration. In this study, inulin, a fructo-oligosaccharide extracted from Jerusalem artichoke roots, was modified by acylation with three acyl chlorides, and the products (C10-, C12-, and C14-inulin) were investigated for their use as novel shale hydration inhibitors. The inhibition properties were evaluated through the shale cuttings hot-rolling dispersion test, the sodium-based bentonite hydration test, and capillary suction. The three acylated inulins exhibited superb hydration-inhibiting performance at low concentrations, compared to the commonly used inhibitors of KCl and poly (ester amine). An inhibition mechanism was proposed based on surface tension measurements, contact angle measurements, Fourier-transform infrared analysis, and scanning electron microscopy. The acylated inulin reduced the water surface tension significantly, thus, retarding the invasion of water into the shale formation. Then, the acylated inulin was adsorbed onto the shale surface by hydrogen bonding to form a compact, sealed, hydrophobic membrane. Furthermore, the acylated inulins are non-toxic and biodegradable, which meet the increasingly stringent environmental regulations in this field. This method might provide a new avenue for developing high-performance and ecofriendly shale hydration inhibitors.