As a class of natural clay minerals, the special surface characteristic of the negatively charged outer surface and the positively charged inner lumen enables halloysite to be of potential interest for catalytic applications. In this work, thermal treatment and modification with cetyltrimethylammonium bromide made the outer surface of halloysite hydrophobic, which resulted in the selective loading of palladium on the hydrophilic inner surface of halloysite. The designed site-oriented loading endowed catalysts with the desired structure and favorable properties for methane combustion. Because of the uniformly dispersed palladium particles (ca. 2 nm), a suitable ratio of Pd2+/Pd4+, better reducibility, and appropriate surface acidity, the tailored catalyst exhibited a remarkably higher activity with the T-99 decreasing from 620 degrees C (unmodified catalysts) to 425 degrees C. More importantly, the stabilized palladium species could resist sintering and the diminishing of hydroxyl groups on the surface weakened the interaction with water, invoking an excellent long-term cyclic stability and water resistance for methane combustion.