In this paper, hydraulic performance and self-healing capacity of geotextile clay liners containing various amounts of nano-clay are studied. Nano-clay was employed as a substitute of a portion of bentonite. For comparison, the hydraulic performance and self-healing capacity of common geotextile clay liners (geotextile clay liners without any additives) were also experimentally studied. A novel instrument was developed to evaluate the self-healing capacity of geotextile clay liners samples. Atterberg limits and free swell index of neat and modified clayey samples were also measured. Experimental results showed that nano-clay considerably reduces the hydraulic conductivity of geotextile clay liners. It also improves the self-healing capacity of geotextile clay liners. The free swell index and liquid limits of bentonite specimens containing nano-clay were considerably higher than that of normal specimens. It can be concluded that factors affecting the free swell index of bentonite can change the self-healing capacity of geotextile clay liners. In this study, the specimen containing 15% nano-clay showed the best performance in hydraulic conductivity and self-healing capacity among all specimens. In the final, the effect of nano-clay inclusion on the permeability of bentonite is showed through an analytical model using the results of surface tension measurements.