Lost circulation is commonly recognized as one of major drilling complications that cause low efficiency and a high cost in oil or gas well drilling. The current practice of mitigating lost circulation with lost circulation materials (LCM) is still empirical due to the lack of understanding of near-wellbore conditions. This work the first time uses pressure transient data analysis method to infer the near-wellbore conditions in lost circulation wells. The fluid level survey data can be converted to bottomhole pressure p data based on mud weight. Plot of numerical pressure derivatives data versus time data allows for identification of near-wellbore conditions and thus selection of the right type of LCM. Result of this study shows that a zero-slope trend in the plot of numerical data versus time t indicates a near wellbore condition of intersecting radial multiple fractures induced by heavy drilling fluids. Medium size LCM with a wide range of particle size distribution in a lighter drilling fluid are recommended for curring the well. A zero-slope trend in the plot of numerical data versus time t indicates a wellbore that does not intersect any fracture. This suggests using fine size LCM with a narrow range of particle distribution in a lighter drilling fluid to cure the well. A zero-slope trend in the plot of numerical data versus time t implies a wellbore intersecting a singal fracture. This usually occurs in drilling naturally fractured carbonate reservoirs. Coarse size LCM with a wide range of particle size distribution are recommended for curring the well. A field case study illustrates that the result given by this investigation can be used for selecting LCM on the drilling site.