Halloysite nanotube-composited thermo-responsive hydrogel system has been successfully developed for controlled drug release by copolymerization of N-isopropylacrylamide (NIPAM) with silane-modified halloysite nanotubes (HNT) through thermally initiated free-radical polymerization. With methylene blue as a model drug, thermo-responsive drug release results demonstrate that the drug release from the nanotubes in the composited hydrogel can be well controlled by manipulating the environmental temperature. When the hydrogel network is swollen at temperature below the lower critical solution temperature (LCST), drug releases steadily from lumens of the embedded nanotubes, whereas the drug release stops when hydrogel shrinks at temperature above the LCST. The release of model drug from the HNT-composited hydrogel matches well with its thermo-responsive volume phase transition, and shows characteristics of well controlled release. The design strategy and release results of the proposed novel HNT-composited thermo-responsive hydrogel system provide valuable guidance for designing responsive nanocomposites for controlled-release of active agents.