Here, we report a non-toxic method for improving the oil-resistant performance of chitosan coated paper by coating the mixture of chitosan and montmorillonite (MMT) instead of coating chitosan solution only. Through combining MMT into the chitosan coatings, the coated paper exhibited a lower air permeability and enhanced oil resistance under a lower coating load. For coated papers C2.5 and C3 by coating 2.5% (w/v) and 3% (w/v) chitosan without adding MMT in the chitosan coating, the coating load was 3.76 g/m2 and 3.99 g/m2, respectively, and the kit rating values were only 7–8/12. Regarding the sample C2M0.1 coated by the mixed solution containing 2% (w/v) chitosan and 0.1% (w/v) MMT, its coating load was only 3.65 g/m2, the paper permeability after coating was reduced to 0.00507 μm/Pa·s, owing to the filling of MMT into the cellulosic fibers network, and the kit rating reached 9/12. Moreover, C2M0.1 showed improved mechanical properties, whereby its tearing resistance was 5.2% and 6.6% higher than that of the uncoated paper in the machine direction and the cross direction, respectively.