In this study, laponite was tested as a mud-making material for drilling fluids. Laponite is a synthetic smectite clay with a structure and composition closely resembling the natural clay mineral hectorite. Commercially available laponite was characterized by X-ray diffractometry, scanning electron microscopy and infrared spectrometry. Its dispersibility, salt resistance and high-temperature resistance were evaluated. The results showed that laponite possessed superior cation exchange capacity (140.4 mmol/100 g) with interlayer cations of Na+ and Li+. Laponite could easily be dispersed in water to yield increased viscosity with no influence from hydration time or temperature. On the other hand, laponite dispersions displayed an excellent heat resistance, with invariant apparent viscosity at high temperatures. For instance, the apparent viscosity of the 2 wt% laponite dispersion underwent changes between 22 and 24 mPa s after hot rolling at 180–240 °C for 16 h. Compared to existing mud-making materials, laponite exhibited better mud-making properties. Furthermore, laponite revealed good compatibility with other additives, and the water-based drilling fluids prepared with laponite as mud-making material showed an excellent stability at elevated temperatures and superior performance–cost ratios. Overall, these findings indicated that laponite had an excellent dispersibility at high temperatures and hence would have promising applications as high-temperature mud-making material for preparing water-based drilling fluids designed for ultra-high-temperature environments.