It is vital to design an optimum drilling fluid density for retaining the stability of wellbore wall in drilling engineering. Under estimated drilling fluid density will induce shear failure of wellbore wall. Conversely, wellbore wall will occur tensile failure. Drilling engineers have been looking for an optimum drilling fluid density for a long time. A new method to compute the optimum drilling fluid density was established in this study. Wellbore wall occurs displacement in the process of forming wellbore. The displacement of wellbore wall causes wellbore collapse or fracture. By designing a drilling fluid density to prevent the displacement of wellbore wall from happening, the collapse or fracture of wellbore can be decreased or avoided. Surrounding rocks of wellbore are subject to four forces, overburden pressure, maximum horizontal principal stress, minimum horizontal principal stress and hydrostatic wellbore fluid column, respectively. Mathematical expressions of radial displacement of surrounding rocks of wellbore and drilling fluid pressure were derived through elasticity theory. The latter expression can be used to compute the optimum drilling fluid density. Basic parameters, Young's modulus, Poisson's ratio, overburden pressure, maximum horizontal principal stress, minimum horizontal principal stress, in the expression can be obtained by utilizing logging information. In this work, the new method were used to compute the optimum drilling fluid density of three wells extracted randomly in Tarim Oilfield. Results show that the drilling fluid density values obtained through this method and actual drilling fluid density values in well site have a good fit.