We report the preparation of a reversible photoresponsive ultrathin film containing a photoactive azobenzene polymer poly{1-4[4-(3-carboxy-4-hydroxyphenylazo)benzenesulfonamido]-1,2-ethanediyl sodium salt} (PAZO) and exfoliated layered double hydroxide (LDH) nanosheets using a layer-by-layer (LBL) self-assembly technique. Alternate irradiation with UV and visible light (lambda > 450 nm) results in a reversible switching between the trans isomer and the cis-rich photostationary state of the azobenzene group with concomitant significant changes in film color. Fluorescence polarization measurements indicated that the orientation of the azobenzene chromophores in the LDH matrix undergoes a reversible realignment during the photoisomerization processes. Photoisomerization induced by alternate UV and visible light irradiation was accompanied by reversible morphological changes of the LBL film, observable by atomic force microscopy (AFM). Molecular dynamics (MD) studies demonstrated that the LDH monolayers allow sufficient free space for the PAZO to undergo isomerization of its azobenzene chromophores. The reversible photoalignment of PAZO was also followed by MD simulations, and the results are in reasonable agreement with the experimental findings, further validating the configurational and orientational changes proposed for PAZO during the reversible photoprocess. It has been demonstrated that the host (LDH nanosheet)-guest (PAZO) interactions are key factors in determining the reversible photoresponsive performances of the film, since the comparative pristine PAZO film shows no such properties. Therefore, the incorporation of a photoactive moiety within the inorganic nanosheets of LDH by the LBL technique provides an attractive and feasible methodology for creating novel light-sensitive materials and devices with potential read-write capabilities.