Abstract: In arid areas with water shortage in China,in-situ water can not meet the requirement of great amount of water needed in traditional drilling, so new technology is needed to overcome difficulties caused by water shortage. The paper expounded work principle of a new water-saving drilling technology based on local circulation in down hole, exploded key technologies of theory design, introduced application case of the technology in field, and put forward some concrete measures for solving problems exposed in field test. The study indicates that design of new water-saving drilling is novel and requires only simple devices. The new technology can save more than 90 percent of water and can improve drilling efficiency greatly, has significant economic value and broad application prospect.