The use of nanoparticles in drilling fluids is an emerging practice in the oil and gas industry. The nanoparticles used vary in diameter, size distribution, as well as the material used to enhance the rheological and filtration properties of the drilling fluid to which they are applied. Various studies have been conducted to determine the effectiveness of nanoparticle-enhanced drilling fluids, and a wide spectrum of results have been observed. There is ongoing debate as to the ability of nanoparticles to improve the rheological and filtration properties of drilling fluids in a variety of settings. Theoretically, nanoparticles can create a stronger colloidal solution based on their high surface area to volume ratio. In addition, they can plug microfractures and shale pore throats mechanically, increasing shale stability of the drilling fluid. Furthermore, nanoparticle-enhanced drilling fluids have shown excellent stability in high pressure/high-temperature environments, making them ideal for ultra-deep wells. This study investigates the impact of nanoparticles on drilling fluid properties and overall drilling operation for a representative well in the Powder River Basin (Wyoming). The research was conducted in two stages: (1) experimental measurements and optimization of drilling fluid properties, (2) drilling simulation of a reference drilling fluid with optimum nanoparticle-enhanced drilling fluid. In the end, an ideal drilling fluid formulation was identified based the parameters measured during simulation and rheological and filtration data obtained during the experimentation phase, along with consideration of the shale stability and fluid stability at high pressure/high-temperature environments.