A major component in drilling operation success is drilling fluid performance. The cost of searching for hydrocarbon reserves becomes more expensive when drilling occurs offshore, in deep water, and in hostile environments. These drilling environments require fluids that excel in performance. Measuring fluid performance requires the evaluation of all key drilling parameters and their associated cost. Simply stated, the effectiveness of a fluid is judged by its influence on overall well cost. This chapter discusses the various fundamentals of drilling fluids and their performance in assuring a safe and expeditious drilling operation at minimum overall cost.