Illite, a natural lamellar clay, exhibits various benefits, including far-infrared emission, antimicrobial activity, UV shielding, and skin-brightening. While illite is used in various industries such as construction, agriculture, and foods, its cosmetic use has been limited by skin irritation caused by its sharp morphology, photo-discoloration, and photothermal skin dehydration. To overcome these drawbacks, we engineered illite particles coated with a biocompatible hydrogel. We characterized their structural and thermal properties, as well as their physicochemical properties, such as moisture content and water retention capacity. To evaluate the functionality of the hydrogel-coated illite particles, a model sunscreen formulation incorporating the coated particles was prepared, and its physical and rheological properties, functional performance, and biological safety were investigated. These findings demonstrate promise of hydrogel-coated illite as an advanced cosmetic ingredient.