In real time drilling, the complexity of drilling fluid filtration is majorly attributed to changing mud rheology, formation permeability, mud particle size distribution (PSD), filter cake plastering effects, and geochemical reaction of particles at geothermal conditions. This paper focuses on quantifying the major effects as well as revealing their contribution toward effective wellbore stabilization in sandstone formations. We conducted an extensive experimental and analytical study on this subject at different levels. First, we used field application and the results as guides for our experiments. We have considered both oil-based mud and water-based mud. Next, we optimized the mud particle size distribution (PSD) by carefully varying the type, size, and concentration of wellbore strengthening material (WSM). Laboratory high pressure high temperature fluid loss tests were carried out on Michigan and Bandera Brown sandstones. The results from these tests identify the formation heterogeneity and permeability in successful wellbore stabilization. Filter cake permeability calculations, using the analytical model for linear systems, were consistent with filtration rates, and the expected trend of permeability declines with time. Finally, we investigated the evolution of internal filter cake and plastering mechanism, using scanning electron microscopic (SEM) analysis. The test results revealed a significant difference in the formation permeability impairment for the optimal mud PSD and WSM blend.