Zinc Oxide (ZnO) has received lot of attention as a nanostructured material because of unique properties rendering it suitable for various applications. One particular application focussed here for the first time is to form Clay-ZnO nanocomposites for use in drilling fluids to ensure uniform dispersion and superior rheology. Two major clays namely bentonite and attapulgite were tested. Bentonite is commonly used as a rheology modifier but faces the limitations of flocculation and instability at high temperature conditions. Attapulgite whereas, is a new clay material and have shown to be better than bentonite based clays. The rheology of drilling fluids plays an important role in controlling drilling operations. Severe drilling problems like lost circulation, pipe sticking, formation damage and high torque and drag are common in extended reach drilling operations that limits the performance and are mainly responsible for huge financial losses in the form of expensive drilling fluid additives and lost production time. This work presents an initiative to modify the commonly used clays by coating them with zinc oxide nanorods (sizes ranging from 6-10 nm) to maintain remarkable colloidal suspensions thus enabling homogeneous drilling fluid recipes.