Fabrication of nanofiber-based drug delivery system with controlled release property is of general interest in biomedical sciences. In this study, we prepared an antibiotic drug tetracycline hydrochloride (TCH)-loaded halloysite nanotubes/poly(lactic-co-glycolic acid) composite nanofibers (TCH/HNTs/PLGA), and evaluated the drug release and antibacterial activity of this drug delivery system. The structure, morphology, and mechanical properties of the formed electrospun TCH/HNTs/PLGA composite nanofibrous mats were characterized using scanning electron microscopy (SEM), Fourier transform infrared spectroscopy, and tensile testing. We show that the incorporation of TCH-loaded HNTs within the PLGA nanofibers is able to improve the tensile strength and maintain the three-dimensional structure of the nanofibrous mats. In vitro viability assay and SEM morphology observation of mouse fibroblast cells cultured onto the fibrous scaffolds demonstrate that the developed TCH/HNTs/PLGA composite nanofibers are cytocompatible. More importantly, the TCH/HNTs/PLGA composite nanofibers are able to release the antibacterial drug TCH in a sustained manner for 42 days and display antimicrobial activity solely associated with the encapsulated TCH drug. With the improved mechanical durability, sustained drug release profile, good cytocompatibility, and non-compromised therapeutic efficacy, the developed composite electrospun nanofibrous drug delivery system may be used as therapeutic scaffold materials for tissue engineering and drug delivery applications.