Abstract: In the second section drilling of Argentina San Jorge Oilfield, it is necessary to drill through mudstone and tuff formations. These formations are characterized by extensive micro-fractures. Both montmorillonite and quartz contents are high with strong water-sensitivity. Currently the BIOCAT drilling fluid system adopted often results in wellbore collapse frequently and abandoning 2-4 wells every year. The borehole enlargement rate was over 100% in an unstable hole section in drilled wells. In order to resolve these problems, the impermeable anti-collapsing inhibitive polymer drilling fluids system is developed by optimizing the SRIPE-inhibitors with high anti-collapsing inhibitor instead of BIOCAT. In addition, an inhibitor with addition of impermeable agent SMT3 and sealing materials such as graphite, calcium carbonate, etc. were included. Laboratory experimental results showed that the optimized drilling fluid system has stronger inhibitive and anti-collapse capacities than BIOCAT system. The swelling increment decreases by over 10% and recovery rate increases by 60%-70%. In addition, it can efficiently prolong the borehole wall stable period by 100%. Good results have been achieved in applications of the system in 24 wells. Compared with adjacent wells with application of BIOCAT drilling fluid system, wellbore collapses decreased significantly and borehole diameter enlargement in unstable hole section in wells decreased from 100% to 10%, drilling time decreased by 15% and drilling cost decreased by 10%. Results suggest that the impermeable anti-collapsing inhibitive polymer drilling fluid system application in Argentina’s San Jorge Oilfield can effectively solve wellbore instability problems.