Abstract: With the development of material design theories and synthesis technologies, clay-based composite materials have been controllably prepared and successfully applied in many fields, such as biomedicine, the automotive industry, petrochemical engineering, and wastewater treatment. To date, for the preparation of clay-based composite materials, the physical and chemical properties of clay must be fully considered, including the chemical composition, crystal structure, particle size, morphology, and surface charge. Halloysite, which has a tubular crystal structure, is a curly layered aluminosilicate clay with abundant reserves and a low price for constructing composite materials. The inner and outer surfaces of halloysite nanotubes are composed of Al?OH octahedrons and Si?O tetrahedrons, respectively, which ionize in opposite ways in water, resulting in opposite charges on the inner and outer surfaces. Therefore, the selective modification of halloysite can be achieved by chemical or electrostatic adsorption of the required chemical reagent. Additionally, the modified halloysite nanotubes can be used in catalysis and the loading and release of drug molecules. Moreover, because of its nanotube structure, the halloysite can be used to construct rough structures in micro- or nano-scale. By incorporation with low-surface-energy materials, the hydrophobic halloysite-based composite materials can be prepared for self-cleaning and oil-water separation. In this review, we introduced the rational design and preparation strategies of the hydrophobic halloysite-based composite materials. Then, we summarized the applications of these prepared composite materials in oil-water separation, hydrophobic self-cleaning coating, and the loading and sustained release of drug molecules. In addition, the related mechanisms and strategies for performance improvement were systematically discussed. Finally, the existing challenges and promising future directions in this research field were proposed. The halloysite-based composite materials have enhanced properties that are highly required, including enhanced mechanical and adhesive strength, excellent scratch and wear resistance, self-healing, and higher compatibility with living organisms. We believe fruitful promising results can be achieved in this field with more effort.