The continuous growth of energy requirements, together with diminishing production, necessitates fireless efforts to develop new technology frontiers in oilfield operations. The hydrocarbon reservoirs residing below the shale and near to the depletion stage are not recoverable using conventional methods. Therefore, innovation is necessary to drill non-traditional hydrocarbon reservoirs present in the basin scale with a difficult approach. An understanding of drilling fluid rheology helps to design a fluid system with better features that can overcome issues faced during unconventional drilling processes. The attention of the scientific community has been diverted towards the water base drilling fluid system that has a low environmental footprint. When the water base drilling fluid physically and chemically interact with clay, this may cause swelling, bit balling, or blockage of the wellbore. The aim of this paper is to provide a comprehensive review of inhibitors, aiming to understand the clay swelling mechanisms and the development of water-based mud additives for hydration restriction. The suitable shale inhibitors must not only efficiently diminish the clay hydration swelling but also fulfill the progressively rigorous environmental regulations, even though staying cost-efficient. The green shale inhibitors reported in the literature include amines, acrylamide, alcohols, biomolecules and silica-based additives for water-based mud. Further critical analysis is provided with a comprehensive understanding of the inhibition mechanisms for shale and the development of effective water-based shale inhibitors. The gaps in the current literature are identified to help readers to identify prospects for improvements in the drilling fluids that can help to explore possible future directions.