Abstract: Borehole stability is the key for successful underbalanced drilling. During conventional drilling, borehole instability is caused by the mechanical and chemical mechanism, which gets larger by the underbalance. The formation fluid flows into the borehole unceasingly during the underbalanced drilling. After the borehole is formed, the stress around the borehole will be distributed again accompanied by the percolation of the formation fluid. Then the borehole stability will be influenced. The solution of stress distribution around borehole is obtained regarding the rock as porous medium, considering the earth stress and the additional stress when the formation fluid flow into borehole through the rock. The caving pressure formula of underbalanced drilling is established based on the Mohr-Coulomb strength criteria. The calculation result shows that during the underbalanced drilling the situation of the borehole will get instable considering the percolation when the formation fluid flows into borehole. The application to the Tazhong 722 well shows that the theoretical results match the practical situation. It is indicated that the model is verified and can be popularized further.