The physical state and its dynamics were studied at the quantitative level for drilling sludge (finely dispersed waste of the oil industry). Using original methodological approaches, the main hydrophysical and technological properties of sludge samples were assessed for the first time, including the water retention curve, the specific surface, the water conductivity, the electrical conductivity, the porosity dynamics during shrinkage, the water yield, etc., which are used in the current models of water transfer and the behavior of these soil-like objects under real thermodynamic conditions. The technologically unfavorable phenomenon of the spontaneous swelling of sludge during the storage of drilling waste was theoretically explained. The water regime of the homogeneous 0.5-m thick drilling sludge layer under the free gravity outflow and permanent evaporation of water from the surface was analyzed using the HYDRUS-1D model. The high water retention capacity and the low water conductivity and water yield of sludge do not allow their drying to the three-phase state (with the entry of air) acceptable for terrestrial plants under humid climatic conditions, which explains the spontaneous transformation of sludge pits to only hydromorphic ecosystems.