Aim of this work was to systematically investigate the effect of three factors (including hydrophobic block length, the type and amount of hydrophobic monomers) affecting on the rheology of hydrophobically modified polyacrylamide. Additionally, attempts were made to synthesize polymers with higher molecular weight and consequently higher rheological properties. Acrylamide (AM) was copolymerized with 2-acrylamido-2-methyl-1-propanesulfonic acid (AMPS) and three hydrophobic monomers of styrene (St), N-para-ethylphenylacrylamide (EφAM), and N-benzylacrylamide (BAM) using the micellar polymerization method to optimize the rheological properties of drilling fluids. The synthesized terpolymers were characterized using FT-IR and 1H NMR techniques, confirming successful polymerization. Rheological properties were evaluated under various conditions, alongside dynamic light scattering (DLS), to investigate the relationship between the polymers’ microstructure and the viscosity of their aqueous solutions. The rheological behavior of the fluids was studied in tap water, divalent salt (CaCl2), and monovalent salt-saturated water (SSW), both before and after hot rolling at 250°F for 4 h. All polymer fluids showed shear-thinning behavior. After hot rolling, the polymers showed improved performance in deionized water, but their properties declined in salt-saturated water. The polymer containing the EφAM monomer demonstrated exceptional resistance to shear, salt, and high temperatures due to its unique structure and high hydrophobicity, that making it suitable for drilling fluid applications. To enhance the molecular weight and rheological properties, the optimal polymer was re-synthesized with adjustments to the initiator amount and monomer concentration. The modified polymer, AMAE’’8.1, showed enhanced resistance in salt-saturated water and exhibited properties similar to natural polymers, such as xanthan gum.