Nanoclay can be incorporated into emerging dual functional drug delivery systems (DDSs) to promote efficiency in drug delivery and reduce the toxicity of doxorubicin (DOX) used for thyroid cancer treatment. This paper reports the expansion of the basal spacing of kaolinite nanoclay was expanded from 0.72 nm to 0.85 nm, which could provide sufficiently spacious site for hosting doxorubicin molecules and controlling the diffusion rate. A targeted design for papillary thyroid cancer cells was achieved by introducing KI, which is consumed by the sodium-iodide symporter (NIS). As indicated by MTT assays, confocal laser scanning microscopy and bio-TEM observations, methoxy-intercalated kaolinite (KaolinMeOH) exhibited negligible cytotoxicity against papillary thyroid cancer cells. By contrast, DOX-KaolinMeOH showed dose-dependent therapeutic effects in vitro, and KI@DOX-KaolinMeOH was found to act as a powerful targeted therapeutic drug. Furthermore, active and passive targeting strategies played a role in the accumulation of the drug molecules, as verified by an in vivo bio-distribution analysis.