Water-based lubricants are thought to be the next generation green lubricants, however, there are very few developments of aqueous grease lubricants. Here, water-based grease lubricants were developed using the food fat replacers. The concept of using fat replacers was inspired by the historical usage of fat as a lubricant. Dextrins were chosen as the fat replacers and mixture of water and PEG as the base fluid. Dextrins with different molecular weights were selected to study its effect on the rheological, tribological and thermal behavior of the gels. It was found that only higher molecular weight dextrins will form the colloidal gels, whereas low molecular weight dextrins will form the colloidal solution. The SEM images of the dried samples showed the agglomerated micro-spherical network with the void to hold the base fluid. It was found that, at an optimum concentration, the fat replacers showed 35–58% lower friction and 29–41% lower wear than the pure PEG200/water solution regardless of their molecular weight. The spherical shaped colloidal particles will form the film over the metal surface by nano-filling and these particles will act as nano-bearings which will reduce the wear and friction. These gel lubricants can be used where the highly biodegradable and bio-compatible green lubricant is needed.