The aim of this study was to evaluate effects of palygorskite-based antibacterial agent (PAA) as an alternative to antibiotic on growth performance, intestinal barrier function, and immunity in broilers. Three hundred and eighty-four mixed-sex 1-day-old Ross 308 broiler chicks were allocated into 6 groups of 8 replicates with 8 birds each. Birds were given a basal diet, an antibiotic diet (50 mg/kg chlortetracycline), and the basal diet supplemented with 250, 500, 1,000, and 2,000 mg/kg PAA for 42 d, respectively. Compared with control group, supplementing 1,000 mg/kg PAA reduced overall feed conversion ratio (P < 0.05), with its value being similar to that of antibiotic group (P > 0.05). However, a higher level of PAA (2,000 mg/kg) increased feed conversion ratio during the late period (P < 0.05). The 1,000 and 2,000 mg/kg PAA decreased plasma endotoxin and D-lactate levels at 42 d (P < 0.05) to comparable values (P > 0.05). The 1,000 mg/kg PAA decreased jejunal crypt depth, while 500 and 1,000 mg/kg PAA increased the ratio between jejunal villus height and crypt depth at 42 d (P < 0.05), with their values being similar to antibiotic group (P > 0.05). The highest level of PAA increased 42-d jejunal mucosal secretory immunoglobulin A and immunoglobulin M concentrations (P < 0.05). The 1,000 and 2,000 mg/kg PAA reduced 21-d interleukin-1β and tumor necrosis factor-α (TNF-α) levels in serum and ileal mucosa and 42-d interferon-γ level in serum and jejunal mucosa (P < 0.05), which did not differ from antibiotic group (P > 0.05). Moreover, PAA administration, regardless of its dosage, reduced 42-d serum TNF-α concentration, and 500 to 2,000 mg/kg PAA decreased 21-d and 42-d jejunal and 42-d ileal mucosal TNF-α levels (P < 0.05), with their values being comparable with antibiotic group (P > 0.05). The results suggested that PAA as an alternative to antibiotic could improve growth performance, intestinal barrier function, and immunity of broilers, and its optimal dosage was 1,000 mg/kg.