Wellbore instability was and is one of the most frequent problems in petroleum industry, especially in the field of drilling and exploration. Anomalies appearing within wellbore instability are mainly caused by the shale formations represented with 75% of all drilled formations. Problems involving wellbore instability include tight hole spots, wellbore diameter enlargement, cavings appearance, inability of carrying out wireline operations, poor hole cleaning and unsuccessful wellbore cementing operations and other. Sometimes, these problems cause even the abandonment of a certain sections or the whole well. According to recent studies, wellbore instability and associated problems costs are more than one billion US dollars per year. Wellbore instability is a result of mechanical and physico-chemical causes mostly acting concurrently. Shale instability cause basically comes out of its mineralogical composition (especially clay minerals content) and physico-chemical properties. Shale-mud interaction includes water/ions movement in and out of the shales due to pressure differential, osmosis, diffusive flow and capillary pressure. Water entering the shale hydrates clay minerals, i.e. shale swelling. This process changes shale’s physico-chemical and mechanical properties. Many research activities about shale instability causes and shale properties (affecting shale behavior) definition have been carried out by now. Different shale samples, laboratory equipment and inhibitive muds have been used. Laboratory tested shale samples are provided by the wellbore cores, surface sampling or, which is the simplest method, by collecting the samples at the shale shakers during drilling operation. The amount of these samples (cores retrieved) is not enough for laboratory investigation. Another problem is closely connected to sample quality and preservation. During the testing different inhibitive muds are used (water or oil based), sometimes containing more than one shale inhibitor. That way results analysis is more complicated as it is very hard to estimate influence of each inhibitor on lessening and prohibition of clay hydratation and shale swelling. Different laboratory equipment and methods are used by different researchers during the testing processes, which include simple linear swelling measurement of shale samples, pressure transmission measurement and downhole simulation cell measurements. These various methods, equipment, shale samples and muds used make difficult to compare test results and conclusions made by different authors. IV Laboratory tests presented within this thesis are done with artificial samples (pellets) made by compacting the powderish material containing exact amount of quartz, montmorillonite and kaolinite. There was total of twelve samples tested divided into three basic groups having different quartz content (0, 10 and 20% by mass weight). There are four samples in each group with different montmorillonite content (80, 60, 40 and 20% by mass weight). Pellets are compacted for thirty minutes by applying pressure of 34,5 MPa, which is equivalent to overburden pressure acting on a shale layer at 1500 m of depth. Laboratory testing is done by treating the powderish samples 24 hours a day inside the dessicator with exact relative humidity, 30-minute compaction, 24-hour swelling in linear swellmeter and 24- hour drying. Sample swelling is tested within different mud types and the sample mass is measured in each above mentioned phase. In the first phase of laboratory testing pellet swelling is measured in salt solutions (sodium chloride, potassium chloride and calcium chloride) with different salt content (5, 10 and 15% by mass weight). Second phase includes inhibitive muds testing (potassium mud, salt water and gypsum muds). Inhibitive cations content (K+, Na+ and Ca2+) in these muds was constant but the polyanionic cellulose content was changed. Results of the laboratory tests have shown that higher salt concentration does not contribute to shale swelling lessening. It is very important as higher salt amounts used in muds are ecologically unacceptable due to the great impact on flora and fauna. That was the reason why minimal salt contents (5% by mass weight) were used. Used muds influence on the total pellet swelling and swelling intensity, especially at the early phase of testing. Given results of swelling measurement and inhibitive muds properties gave the simulation of wellbore diameter change, flow area change and pressure drop due to friction induced by resistance of the flowing mud in the annular. This simulation has shown that swelling greatly influences pressure drop in case of smaller wellbore diameter. During the laboratory testing, special attention is directed to preparation and pellets content definition as a good replacement for original shale in laboratory testing of shale and drilling fluid interaction.