Transition metal modified lignosulfonates are major type of clay dispersant used in the drilling industry. Especially, chromium of chromium/iron lignosulfonate has been used as one of main drilling fluid additives for over thirty years. Recently efforts have been directed to substitute chromium with other transition metal ions due to potential toxic effect of chromium. A study on the basic design of transition metal modified lignosulfonate showed three reaction parameters which affect performance as clay dispersant. These include type and concentration of transition metal ion employed, oxidation level and pH of reaction medium during oxidation, and sources of lignosulfonate raw material. A titanium/zirconium lignosulfonate prepared under optimum reaction condition was found to give highly effective clay dispersants. Testing of this new titanium-zirconium lignosulfonate was also compared with other commercially available dispersants from the viewpoint of various rheological properties required in the drilling fluids.