The present invention generally relates to a method and an apparatus for drilling with casing. In one aspect, a method of drilling a wellbore with casing is provided, including placing a string of casing with a drill bit at the lower end thereof into a previously formed wellbore and urging the string of casing axially downward to form a new section of wellbore. The method further includes pumping fluid through the string of casing into an annulus formed between the casing string and the new section of wellbore. The method also includes diverting a portion of the fluid into an upper annulus in the previously formed wellbore. In another aspect, a method of drilling with casing to form a wellbore is provided. In yet another aspect, an apparatus for forming a wellbore is provided. In still another aspect, a method of casing a wellbore while drilling the wellbore is provided.