In this study, polyethylenimine (PEI) and PEI-montmorillonite clay composites (PMt) were encapsulated in alginate beads, with or without formaldehyde (FA)-degrading bacteria, to remove FA from water. The effects of additives on the structural and functional properties of the beads, including their water content, stability, mechanical strength, surface area, and morphology, were studied. The adsorption kinetics and adsorption capacity of the beads were investigated, and the FA removal efficiency was established by co-encapsulating bacteria with PEI or PMt in alginate beads. Montmorillonite reduced PEI leaching and curbed swelling and shrinking effects induced by PEI−alginate interactions. The mechanical strength increased by 65% for PEI beads and up to 130% for PMt beads compared to that of plain alginate. FA adsorption reached 59 mg•g −1 for PEI beads or 32 mg•g −1 for PMt beads. When combined with FA-degrading Pseudomonas putida, the PMt composite could stabilize pH for a longer period of time, and a high removal performance was achieved upon repeated use. The obtained results highlight the potential of alginate beads reinforced by clay composites to serve as an efficient platform for the removal of FA from industrial wastewater. Furthermore, these hybrid materials could be designed to improve various chemical reactions and applied as robust sorbents and/or catalysts in industrial and environmental settings.