In this work, diatomaceous earth (DE) or diatoms are modified with Mg–Al-layered double hydroxide (DE-LDH) using the facile co-precipitation method to demonstrate their application for the removal of toxic dyes such as Congo Red (CR), which was used as a model. Field emission scanning electron microscopy (FE-SEM) characterization confirms the successful modification of diatom microcapsules structures, showing their surface decorated with LDH nano patches with sheet-like morphologies. The surface area of the DE was enhanced from 28 to 51 m²/g after modification with LDH. The adsorption studies showed that the maximum CR removal efficiency of DE and DE-LDH was ~15% and ~98%, respectively at pH 7, which is a significant improvement compared with unmodified DE. The maximum adsorption capacities of DE-LDH were improved ten times (305.8 mg/g) compared with the bare DE (23.2 mg/g), showing very high adsorption performances. The recyclability study of DE-LDH up to five cycles, after desorbing CR either by methanol or by NaOH, showed the efficient removal of the CR by up to three cycles via adsorption. The presented study suggests the promising application of DE-LDH as an effective material for application in the removal of CR from aqueous solutions for industrial wastewater treatment.