Alumina-pillared montmorillonite clays (Al-PILC), prepared under ultrasonic (US) agitation and normal stirring (S) methods, have been used as a host material to encapsulate Co phthalocyanine (CoPc) complex. The amount of Co varies from 0.27 to 1.48 wt.% in the samples, depending on the input concentration of Co. Powder X-ray diffraction and other characterization techniques reveal that the structure of Al-PILC remains intact after the incorporation of the complex into the pores through a pyridine solution of the complex by ultrasonic agitation. A substantial decrease in the BET surface area and total pore volume of Al-PILC points to the occupation of the CoPc moieties within the porous structure of the pillared clay. This is further supported by the observation of a band at 1489 cm−1 in the Fourier transform infrared (FTIR) spectra of the encapsulated samples. The FTIR and diffuse reflectance ultraviolet-visible (DRUV-Vis) spectral results indicate that the encapsulated CoPc complex in the clay matrix undergoes distortion in order to accommodate itself within the pores of the Al-PILC. The encapsulated samples prepared by ultrasonification show better dispersion of the complex than the samples prepared under normal stirring conditions. Compared to the ‘neat’ complex, the encapsulated samples (CoPc in Al-PILC) exhibit greater turnover in the test reaction of the oxidation of benzyl alcohol to benzaldehyde with tert-butyl hydroperoxide as the oxidant at 373 K. The method of preparation and consequent site isolation of CoPc in Al-PILC influence the catalytic activity.