Toxicity tests are important for assessing the effects of complex chemical mixtures, such as waste drilling mud, on aquatic ecosystems. When waste drilling mud is released into the marine environment, strong ocean currents perhaps separate the drilling mud into a solid phase (SP) and a suspended particulate phase (SPP). A comprehensive assessment of drilling mud and base oil was carried out in the laboratory for acute fish toxicity (freshwater fish, marine fish, and benthic organisms) and biodegradability. The results presented in this paper indicate that the LC50 96 h for fresh water, marine and benthic organisms was in the order of base oil > SP > SSP. The 28-day biodegradability of base oil was also more than that of drilling mud. The results also showed that non-aqueous drilling fluids (NADFs) are readily biodegradable. The Spearmen results clearly showed the effects on fish populations from the discharge of drilling mud into aquatic systems. The results showed that the use of NADFs instead of water-based fluids (WBFs) would have lesser adverse impact on the environment.