Various chemical additives are used in drilling fluids to improve drilling efficiency and increase oil production. Dispersing nanoparticles as additives in drilling mud is one of the more promising techniques that could help solve many difficulties of drilling operations. However, the existing research in this field is insufficient and suffers from numerous inconsistent outcomes. This study aims to discover and evaluate the impact of graphite-alumina hybrid nanoparticles on the rheology, thermal properties, zeta potential, and electrical conductivity of water-based drilling fluids. This study shows that that the addition of nanoparticles improves the effectiveness of water-based mud (WBM), both in static and dynamic situations due to the establishment of an appropriate gel structure that can be easily broken under low shear stress. Furthermore, these nanoparticles improve the degree and the speed of structural recovery by reducing the relaxation time, which is necessary to avoid the sedimentation of weighting materials and drilled cuttings. Besides, nanoparticle seeded fluid improves the effective thermal conductivity of conventional drilling fluids, and the highly charged suspension resulting from the addition of nanoparticles is desirable for drilling operations. It is also observed that nanoparticles could penetrate through the porous wall of the wellbore and clog the pores, forming a thin and impermeable cake that reduces drilling fluid loss. When properly engineered, nanoparticles could significantly improve the performance of conventional drilling fluids.