Shale hydration, swelling, and dispersion are the main reasons causing wellbore instability in oil and gas drilling operations. In this research, carboxylated cellulose nanocrystals(C-CNC) were prepared and developed as a shale inhibitor in water-based drilling fluids (WBDF). The inhibitive property of C-CNC was evaluated through immersion experiments, linear swelling measurements and a shale recovery test. The potential inhibition mechanism was studied by observing the external morphology through the scanning electron microscope (SEM), transmission electron microscopy (TEM), and measuring the zeta potential and particle size distribution, and evaluating the plugging performance through filtration test and BET test. The inhibition evaluation results showed that the expansion of 1%C-CNC was 1.41 mm, and the recovery rate of shale of 3%C-CNC can reach 78.8%. C-CNC has better inhibition properties than the widely used potassium chloride(KCl), polyester amine(PA) and polyether(PEA). The mechanism study revealed that these nanoparticles can form a core-shell structure with clay through electrostatic interaction, thereby suppressing the hydration of clay. Furthermore, the free water content of C-CNC suspension is low, and it is easy to form a gel. Through the action of drilling pressure and capillary pressure, C-CNC is squeezed into and filled in the pores and cracks of the shale, forming an adsorption layer and preventing water intrusion. In addition, C-CNC could considerably decrease the filtrate volume of the drilling fluid, while KCl and PEA had negative influences on the properties of the drilling fluid. C-CNC performed great potential to be an effective and biodegradable shale inhibitor in drilling fluids.