The invention relates to the field of well drilling in petroleum industry, and particularly relates to an application of modified chitosan as a shale inhibitor and an application of an anti-temperature and environment-friendly water-based drilling fluid. The modified chitosan has a modifying group represented as the formula (1). The modified chitosan is applied in oil and gas drilling as the shale inhibitor, especially, shale gas well drilling, thereby achieving excellent inhibition effects. The modified chitosan has excellent temperature resistance, so that a high inhibition effect can be maintained even at a high temperature for a long time. The modified chitosan also has the biodegradability of chitosan and belongs to environment-friendly shale inhibitors.