The model of wellbore micro-fracture propagation is established based on the phase field method. The micro-fracture initiation, propagation, steering and other complex phenomena are found through numerical simulation. The influence laws of drilling fluid column pressure and natural fracture on wellbore micro-fracture propagation are analyzed. The collapse pressure preventing micro-fracture propagation is predicted. Results indicate that when the drilling fluid column pressure is low, the wellbore experiences the main stages of micro-fracture initiation, propagation, branch fracture generation and cross connection. As drilling fluid column pressure approaches collapse pressure, the number, length and propagation speed of micro-fracture on wellbore wall decrease. The energy required for initiation of natural fracture is lower than that of rock matrix, and the micro-fracture propagation speed is higher, which increases the collapse pressure of wellbore. When natural fracture connecting with wellbore is located in the azimuth of minimum horizontal stress and the angle is 45°, micro-fracture is easy to initiate and propagate and the risk of wellbore instability is great. The model based on phase field method not only visually simulates the process of micro-fracture propagation and collapse, but also its predicted collapse pressure is consistent with the actual drilling condition. The research provides basic theoretical support for mechanism analysis and prevention of wellbore collapse in fractured formation.