Abstract: Clays in water sensitive subterranean formations are stabilized by injecting a sufficient amount of an unreactive gas, preferably nitrogen, into the formation to substantially fluidize the clays, including migratable fine particles, enabling their removal from the formation. Thereafer, an aqueous solution of soft water containing potassium chloride is injected into the formation to effect a cationic exchange between the potassium and the sodium within the swellable clays to reduce their swelling. An aqueous solution of soft water and potassium hydroxide is then injected into the formation. The potassium hydroxide renders the clays relatively insensitive to the presence of an aqueous liquid having an ionic makeup distinct from connate waters within the formation. Thus, the process protects against formation damage by the presence in the formation of a "fresher" water than the connate. The well treated according to this process can be an injection well or a production well.