Steelmaking is an energy-intensive process that generates considerable amounts of by-products and wastes, which often pose major environmental and economic challenges to the steel-making industry. One of these by-products is steel dust that is produced during the separation of impurities in the smelting and refining of metals in steel-making furnaces. In this study, electric arc furnace (EAF) dust has been evaluated as a potential, low-cost additive to increase the viscosity and weight of drilling muds. Currently, the cost of drilling operations typically accounts for 50 to 80% of the exploration costs and about 30 to 80% of the subsequent field development costs. Utilization of steelmaking waste in drilling fluids formulations is aimed to produce new and optimized water-based drilling formulations, which is expected to reduce the amount of bentonite and other viscosifier additives used in the drilling formulations. The results showed that in a typical water-based drilling fluid of 8.6 ppg (1030.51 kg/m3), the amount of standard drilling grade bentonite could be reduced by 30 wt.% with the addition of the proposed new additive to complete the required mud weight. The mixture proved to be stable with no phase separation.