A novel method for modifying C.I. Pigment Red 21 with sepiolite and lithopone was applied during its preparation process. The morphology and structure of the modified pigment were analyzed by scanning electron microscopy (SEM), transmission electron microscopy (TEM), X-ray diffraction (XRD), and Fourier transform infrared (FT-IR) spectroscopy. The results showed that sepiolite was encapsulated by the organic pigment and lithopone was deposited on the surface of the organic pigment. The particle size of the modified pigment was comparable to that of the original pigment, but the modified pigment had a narrower scatter of diameter and a higher homogeneity than the original pigment. The properties of the modified pigment including tinctorial strength and flowability were slightly improved, and its heat resistance and light fastness were enhanced by 20 degrees C and one grade, respectively. Thermal and UV analyses showed that the thermo- and photostabilities of the modified pigment were significantly improved.