Halloysite nanotubes (HNTs) were functionalized with (3-Chloropropyl)triethoxysilane (CPTS) and sodium ethyl xanthate (NaEtX) to yield HNT-CPTS and HNT-RA respectively. Subsequently, HNT-RA was used as a substrate to graft poly (hydroxyethyl methacrylate) (PHEMA) to yield HNT-PHEMA. Then, HNT and polycaprolactone (PCL), HNT-PHEMA and PCL, and neat PCL in ethanol were electrospun. Successful grafting of CPTS, RA, and PHEMA on HNTs was evaluated by FTIR, TGA, and TEM. Stretching vibrations of C-H, C-O, and C=O bonds confirm the attachment of CPTS, NaEtX, and PHEMA respectively. Formation of PHEMA on the lumen, outer, and inner surface of HNTs is displayed by TEM. Cylindrical morphology of HNTs was revealed by SEM. DLS shows that grafting PHEMA at the surface of HNTs results in breaking of HNTs agglomerates. Surface roughness and morphology of nanofibers were evaluated by TEM. By surface grafting of HNTs with PHEMA, its dispersion in PCL is improved and HNTs removal from the nanofibers is reduced.