Laboratory testing of core material to optimize drilling fluid composition and procedures has been used for many years to minimize invasive formation damage of a mechanical, chemical or biological nature which can occur during the drilling of horizontal or vertical wells. This paper discusses the limitations of past practices such as the use of non-representative core or fluids, non-preserved or non-restored state core, ambient conditions of temperature and overburden pressure, direct injection of muds/filtrates into samples and unrealistically high drawdown gradients for cleanup. The paper describes the current technology used to eliminate many of these concerns and also to extend drilling fluid evaluation technology to extremely heterogeneous carbonate and sandstone formations, fractured formations and specific test equipment and procedures used to evaluate the effectiveness and utility of underbalanced drilling programs.