BZ area has great potential in oil/gas resources and is the key block for exploration and development of Bohai Oilfield. During the drilling process of exploratory Wells, wellbore instability issues in the shales located in the Dongying formation and Shahejie formation occurred frequently. To reveal the borehole instability mechanism of shale in the middle and deep part of BZ area, and to guide the development well drilling design, a series of experiments including electronic microscope scanning, mineral composition testing, mud soaking and rock mechanics tests were carried out on the shale cores from the Dongying formation of BZ area. The physical and chemical properties, rock mechanical properties and the effect of drilling fluid on mechanical properties of the formation were quantitatively described. The experimental results show that the shale in this block is in the process of transformation from hydrating and expanding shale to hard and brittle shale, which not only has the characteristics of hard and brittle mud shale, fracture development, but also has the characteristics of hydration and expansion and dispersion. Based on the experimental results, a borehole wall stability model considering the weak surface and hydration was established by using the linear elasticity theory and the single weak surface strength criterion. The collapse pressure in the directional development wells of BZ area and its variation with the well angle and azimuth angle were analyzed, and the influence of drilling fluid on the collapse pressure was revealed. The results of this paper are helpful for the safe drilling of development wells in BZ area.