A new clay-liposome complex was developed for reducing leaching of herbicides and contamination of groundwater. The liposomes were composed of the neutral and Environmental Protection Agency approved phospholipid phosphatidylcholine (PC). Adsorption of PC liposomes on the clay mineral montmorillonite could exceed the cation exchange capacity of the clay, and was well simulated by the Langmuir equation. X-ray diffraction results for 6 mM PC and 1.6 g/L clay (3 day incubation) yielded a basal spacing of 7.49 nm, which was interpreted as the formation of a supported planar bilayer on montmorillonite platelets. Fluorescence methods demonstrated structural changes which reflected adsorption of PC followed by loss of vesicle integrity as measured by the penetration of dithionite into the internal monolayer of fluorescently labeled liposomes, resulting in a decrease in fluorescence intensity to 18% of initial after 4 h. Energy transfer was demonstrated after 1 h from labeled liposomes to montmorillonite labeled by an acceptor. The neutral herbicide alachlor adsorbed on the liposome-clay complex, yielding a formulation of up to 40% active ingredient, and 1.6-fold reduction in herbicide release in comparison to the commercial formulation. Hence, the PC-montmorillonite complex can form a basis for environmentally friendly formulations of herbicides, which would yield reduced leaching.