Red clay deposit with palygorskite (Pal) as the main component is abundant on the earth, but it is not yet fully utilized in industrial fields because of its deep color. In this paper, we employed a facile one-step solvothermal process to treat red Pal using water, dimethyl sulfoxide (DMSO) and DMSO/water as solvents and studied the effect of this process on the structure, physico-chemical characteristics and color of red Pal. It was revealed that the brick-red Pal still remain its color unchanged after solvothermal reaction in water or DMSO solvent, but it converted to white after reaction in dimethyl sulfoxide (DMSO)/water mixture. When the volume ratio of DMSO to water is 2:1, the product has the best whiteness of 83.3%. The associated minerals such as quartz, feldspar and muscovite did not change significantly and the rod-like crystalline morphology of Pal still remains intact after solvothermal reaction. The leaching of Fe(III) in Pal, the dissolution of α-Fe2O3 and the reduction of Fe(III) by the dimethyl sulfide (the reaction product of DMSO with water) to Fe(II) contributed to the conversion of red Pal to white one. The conversion of brick-red Pal to white would lay a foundation for the applications of deep-colored clay minerals in the fields of chemical industries and composite materials.