This study investigated the potential of halloysite nanotubes (HNTs) to improve the sustained release properties of chitosan (CS) microparticles cross-linked ionically with tripolyphosphate (TPP). Composite CS-HNTs microparticles were obtained by a simple and eco-friendly procedure based on a coaxial extrusion technique. Prior to encapsulation, a water-soluble model drug, verapamil hydrochloride (VH), was adsorbed successfully on HNTs. The microparticles were characterized by optical microscopy, Fourier transform infrared (FTIR) spectroscopy, differential thermal analysis/thermogravimetric analysis (DTA/TG) and evaluated for encapsulation efficiency and drug-release properties. The composite particles had a slightly deformed spherical shape and micrometric size with average perimeters ranging from 485.4 ± 13.3 to 492.4 ± 11.9 µm. The results of FTIR spectroscopy confirmed non-covalent interactions between CS and HNTs within composite particle structures. The DTA and TG studies revealed increased thermal stability of the composite particles in comparison to the CS-TPP particles. Drug adsorption on HNTs prior to encapsulation led to an increase in encapsulation efficiency from 19.6 ± 2.9 to 84.3 ± 1.9%. In contrast to the rapid release of encapsulated model drug from CS-TPP microparticles, the composite CS-HNTs microparticles released drug in a sustained manner, showing the best fit to the Bhaskar model. The results presented here imply that HNTs could be used to improve morphology, encapsulation efficiency and sustained drug-release properties of CS microparticles cross-linked ionically with TPP.