A palygorskite-iron oxide nanocomposite (Pal-IO) was synthesized in situ by embedding magnetite into the palygorskite structure through co-precipitation method. The physico-chemical characteristics of Pal-IO and their pristine components were examined through various spectroscopic and micro-analytical techniques. Batch adsorption experiments were conducted to evaluate the performance of Pal-IO in removing Pb(II) from aqueous solution. The surface morphology, magnetic recyclability and adsorption efficiency of regenerated Pal-IO using desorbing agents HCl (Pal-IO-HCl) and ethylenediaminetetraacetic acid disodium salt (EDTA-Na₂) (Pal-IO-EDTA) were compared. The nanocomposite showed a superparamagnetic property (magnetic susceptibility: 20.2 emu g⁻¹) with higher specific surface area (99.8 m² g⁻¹) than the pristine palygorskite (49.4 m² g⁻¹) and iron oxide (72.6 m² g⁻¹). Pal-IO showed a maximum Pb(II) adsorption capacity of 26.6 mg g⁻¹ (experimental condition: 5 g L⁻¹ adsorbent loading, 150 agitations min⁻¹, initial Pb(II) concentration from 20 to 500 mg L⁻¹, at 25 °C) with easy separation of the spent adsorbent. The adsorption data best fitted to the Langmuir isotherm model (R² = 0.9995) and pseudo-second order kinetic model (R² = 0.9945). Pb(II) desorption using EDTA as the complexing agent produced no disaggregation of Pal-IO crystal bundles, and was able to preserve the composite's magnetic recyclability. Pal-IO-EDTA exhibited almost 64% removal capacity after three cycles of regeneration and preserved the nanocomposite's structural integrity and magnetic properties (15.6 emu g⁻¹). The nanocomposite holds advantages as a sustainable material (easily separable and recyclable) for potential application in purifying heavy metal contaminated wastewaters.