The removal of persistent dye pollutants from wastewater remains a major environmental challenge, particularly due to the limited efficiency, stability, and reusability of clay-based catalytic systems. The present study aimed to develop an environmentally friendly and magnetically recoverable biopolymer–clay composite catalyst with enhanced performance for dye decolorization via a heterogeneous Fenton-like process. A novel catalyst composed of xanthan gum (XG), kaolin, and CoFe2O4 was synthesized and designated as XG-CF-K. The composite exhibited a Brunauer–Emmett–Teller surface area of 58.55 m2 g–1 and a saturation magnetization of 27.2 emu g–1. The catalyst was applied for the decolorization of malachite green (M-GR). The effects of various operational parameters, including XG-CF-K dosage, H2O2 concentration, pH, initial dye concentration, reaction time, and the presence of salt, were investigated systematically. Under optimal conditions (1 g L–1 XG-CF-K dosage, 20 mg L–1 M-GR concentration, pH 6, 0.147 M H2O2, 25°C, and 20 min reaction time), a decolorization efficiency of 95.9% was achieved. The decolorization kinetics followed a pseudo-first order model and were well described by the Langmuir–Hinshelwood mechanism. In addition, the catalyst exhibited good stability and reusability, and a plausible degradation mechanism was proposed. Overall, the results demonstrate that XG-CF-K is an effective, sustainable, and reusable catalyst for the removal of dye pollutants, offering a promising approach for wastewater-treatment applications.