Shale formation has the mechanical characteristics of acclimation. Its mechanical strength is uncertain during hydration when contact with the incompatible drilling fluid. This uncertainty shows that shale strength decreased and collapse stress increased as time extending. Simultaneously, drilling fluid density will increase in order to keep formation stability. And then drilling rate would be influenced unfavorably. The conventional experiments and property index be used to evaluate compatibility between shale and drilling fluid can not display borehole stability sufficiently in shale formation. The capability of borehole stabilization of drilling fluid is evaluated combined with deformation and failure law and intensity of shale. The field application shows decreased drilling fluid density by a large degree and approved borehole stability and drilling rate increasing. It is very indispensable to utilize the study of deformation and failure law and intensity of shale in evaluation of drilling fluid in order to keep borehole stability in shale formation. The application of existed approach and target to evaluate drilling fluid performance combined with shale deformation and failure law would make the study and development of drilling fluid more scientifically and reasonably.