Soils contaminated with a mixture of heavy metals and polycyclic aromatic hydrocarbons (PAHs) pose toxic metal stress to native PAH-degrading microorganisms. Adsorbents such as clay and modified clay minerals can bind the metal and reduce its toxicity to microorganisms. However, in a mixed-contaminated soil, an adsorption process more specific to the metals without affecting the bioavailability of PAHs is desired for effective degradation. Furthermore, the adsorbent should enhance the viability of PAH-degrading microorganisms. A metal-immobilizing organoclay (Arquad® 2HT-75-bentonite treated with palmitic acid) (MIOC) able to reduce metal (cadmium (Cd)) toxicity and enhance PAH (phenanthrene) biodegradation was developed and characterized in this study. The MIOC differed considerably from the parent clay in terms of its ability to reduce metal toxicity (MIOC > unmodified bentonite > Arquad–bentonite). The MIOC variably increased the microbial count (10–43%) as well as activities (respiration 3–44%; enzymatic activities up to 68%), and simultaneously maintained phenanthrene in bioavailable form in a Cd-phenanthrene mixed-contaminated soil over a 21-day incubation period. This study may lead to a new MIOC-assisted bioremediation technique for PAHs in mixed-contaminated soils.