The combination of chemical phosphorus (P) inactivation and submerged macrophyte transplantation has been widely used in lake restoration as it yields stronger effects than when applying either method alone. However, the dose effect of chemical materials on P inactivation when used in combination with submerged macrophytes and the influences of the chemicals used on the submerged macrophytes growth remain largely unknown. In this study, we investigated P inactivation in both the water column and the sediment, and the responses of submerged macrophytes to Lanthanum modified bentonite (LMB) in an outdoor mesocosm experiment where Vallisneria denseserrulata were transplanted into all mesocosms and LMB was added at four dosage levels, respectively: control (LMB-free), low dosage (570 g m−2), middle dosage (1140 g m−2), and high dosage (2280 g m−2). The results showed that the combination of LMB dosage and V. denseserrulata reduced TP in the water column by 32%–38% compared to V. denseserrulata alone, while no significant difference was observed among the three LMB treatments. Porewater soluble reactive P, two-dimensional diffusive gradient in thin films (DGT)-labile P concentrations, and P transformation in the 0–1 cm sediment layer exhibited similar trends along the LMB dosage gradient. Besides, LMB inhibited plant growth and reduced the uptake of mineral elements (i.e., calcium, manganese, iron, and magnesium) in a dosage-dependent manner with LMB. LMB may reduce plant growth by creating a P deficiency risk for new ramets and by interfering with the uptake of mineral elements. Considering both the dose effect of LMB on P inactivation and negative effect on macrophyte growth, we suggest a “small dosage, frequent application” method for LMB application to be used in lake restoration aiming to recover submerged macrophytes and clear water conditions.