High-performance shale stabilizers are urgently required to address the concerns of wellbore instability when drilling troublesome shale wells. Herein, a novel paraffin wax microemulsion (PM) containing cationic surfactant was prepared and evaluated for shale formations. The shale stability performance of PM was studied using shale pressure penetration test, shale swelling and dispersion test. The shale stabilization mechanism of PM was investigated by surface tension, contact angle, surface free energy, capillary tube rise and SEM tests. The experimental findings showed that the pressure penetration time in shale after treatment with PM was extended from 13 to 107 min. And PM could decrease the shale swelling rate by 41.5%, and increase the recovery rate to 89.4%. PM exhibited better sealing and inhibition properties than that of commonly used shale stabilizers. The mechanism research revealed that the nano-droplets in PM could freely penetrate into shale pores and cracks of different sizes to form an effective sealing membrane. The water contact angle reached 91.4° after treatment with PM and the surface energy was significantly reduced, effectively inhibiting surface hydration. Through decreasing the surface tension and changing the wettability, the capillary force experienced a noticeable decrease with further enhanced inhibition of shale hydration. Therefore, the application of PM for shale stabilization exhibited promising potential, suggesting its possible effective utilization in shale drilling.