Nanofluids show potential use in applications related to upstream oil and gas industry to improve the performance of several processes such as exploration, drilling and completion, production and enhanced oil recovery operations. However, their applications to water-based drilling mud (WBM) needs attention to address efficient drilling in an High Pressure and High Temperature (HPHT) environment. In the present work, nanofluid-enhanced WBM (NWBM) are prepared using the nanofluids of CuO and ZnO (size [U+02C2]50. nm) in a xanthan gum aqueous solution as a base fluid, and used as an additive in WBM. The nanofluids are prepared for nanoparticle concentrations of 0.1, 0.3 and 0.5. wt% in base. The prepared nanofluids are added as an additive of 1% (by volume) to WBM. The enhancement in thermal and electrical properties of NWBH is studied. It is observed that NWBM show improved thermal and electrical properties by about 35% compared to WBM. An increased concentration of nanoparticles further enhances electrical and thermal properties of drilling fluids. The NWBM based on CuO nanofluid are observed to show improved thermal properties, and are more resistant to HPHT condition than ZnO-based NWBM. High pressure rheological studies are conducted on NWBM to understand the effect of nanofluids on the rheological properties at varying temperatures (25, 70, 90 and 110. °C) and pressures (0.1. MPa and 10. MPa). The effect of pressure on the rheology of NWBM is more significant at higher temperatures, and indicates better rheological stability in case of NWBM. The most significant role that the nanofluids play is in stabilizing the viscosity at higher temperatures. The experimental data on flow curves obtained for various NWBM are fitted to the classical drilling fluid rheological models (Power Law model, Bingham Plastic model and Herschel-Bulkley model). The Herschel Bulkley model is observed to be the best fit-model for rheological behavior of NWBM and can be applied for efficient NWBM design. © 2014 Elsevier B.V.