A new water-based mud system was successfully introduced as a high-performance, environmentally compliant alternative to oil and synthetic emulsion-based muds (OBM/SBM). Historically, emulsion muds have been the systems of choice when drilling challenging onshore, continental shelf, and deepwater wells to minimize risk, maximize drilling performance, and reduce costs. However, environmental constraints, a high frequency of lost circulation, and the high unit cost of emulsion systems sometimes negate the benefits of their use. Conventional water-based muds (WBM) offer the benefits of environmental compliance, attractive logistics, and a relatively low unit cost but consistently fail to approach the drilling performance of OBM and SBM. The new high-performance, water-based mud (HPWBM) is designed to close the significant drilling performance gap between conventional WBM and emulsion-based mud systems. The system has undergone extensive field testing on very challenging onshore, deepwater, and continental shelf wells that would otherwise have been drilled with oil or synthetic-based muds. This paper provides a detailed, technical overview of the new system, discusses its inherent environmental advantages, and presents case histories comparing performance to offset wells drilled with emulsion and conventional WBM systems.