The important role of montmorillonite in the field of drilling fluids is attributed to its properties, such as hydration swelling, cation exchange, surface interface reactivity, charge, and large specific surface area. In recent years, the development of montmorillonite-based composites has become one of the most valuable ways to improve the performance of drilling fluids and expand their applications. Firstly, the physicochemical properties and organic modification methods of montmorillonite were reviewed, and its principle and advantages in improving drilling fluid properties were discussed. Secondly, the colloidal chemical mechanism of montmorillonite in drilling fluids as well as the rheological properties were summarized, and the relationship between montmorillonite microstructure and macro rheology of drilling fluids was illustrated. Finally, the application challenges of montmorillonite in drilling fluids were briefly analyzed and the development direction of drilling fluids containing montmorillonite was prospected.