Combining the excellent features of halloysite nanoclay and cyclodextrin, a novel hybrid system was designed and synthesized based on covalent attachment of tosylated cyclodextrin to thiosemicarbazide‐functionalized halloysite nanoclay and used for the immobilization of Pd nanoparticles. The resulting hybrid, Pd@HNTs‐T‐CD, was then characterized using various techniques, and successfully used for promoting copper‐ and ligand‐free Sonogashira coupling reactions of halobenzenes and acetylenes in a mixture of water and ethanol. Notably, under Pd@HNTs‐T‐CD catalysis, the reaction could proceed in relatively short reaction time to furnish the corresponding products in high yields. Additionally, the catalyst was recyclable and could be simply recovered and reused for several reaction runs. Results also established negligible leaching of Pd, indicating the efficiency of HNTs‐T‐CD for embedding Pd nanoparticles.