Very little was known about how palygorskite affects soil properties when it constitutes a significant component of the soil clay fraction. This constituted a serious impediment for the proper management of palygorskite-containing soils under irrigated agriculture. The present review is intended to summarize studies on the effects of palygorskite on chemical and physico-chemical properties of soils carried out in recent years, and to discuss future research required in this area. When palygorskite-containing soils are involved in irrigation practices, release of Mg from palygorskite into the soil solution will occur. Magnesium as an exchangeable cation, in turn, is known to decrease aggregate stability and to enhance the dispersivity of the soil clay fractions. On the other hand, magnesium as a dissolved cation is known to improve phosphorus availability in arid soils. Knowledge of factors affecting rheological properties of soil clay suspensions is essential for understanding of mechanisms of water and solid particle transfer through the soil profile. The rheological behavior of soil clay suspensions is, however, complex and cannot be predicted from that of suspensions of standard clays. Although the flocculation value of palygorskite at near neutral pH is significantly lower than that of smectite, the presence of palygorskite in the soil clay fraction will not affect the flocculation value of the soil clay since smectite, which is always present in the clay fraction of palygorskite-containing soils, has a dispersive effect on palygorskite. Palygorskite has the strongest disaggregation potential and the highest ability to migrate in the soil among common phyllosilicates such as smectite and kaolinite. Palygorskite particles are thus likely to move preferentially over smectite and kaolinite downward in the soil profile, and eventually to clog soil pores. Disaggregation and migration of palygorskite from the surface-soil during rainfall and/or irrigation may have an effect on the degree of erosion as well. Palycretes (duripans in which the cementing material is dominantly composed of palygorskite) can be formed in some landscapes. Where palycretes occur close to the surface, plant growth is severely impeded. Palycretes also reduce water permeability of the soils, creating water-logged conditions that necessitate drainage installation. Although some progress has been made recently in understanding the effects of palygorskite on chemical and physico-chemical properties of soils, much research remains to be done. Performing some additional studies on disaggregation potential and migration ability of palygorskite under conditions close to those in the field is strongly desirable. Scanning electron microscopy observations on possible changes in aggregation of palygorskite in soils following intensive irrigation might be useful. Studies of the rheological behavior of soil clays with different mineralogical composition, and palygorskite-containing soil clays in particular, are strongly encouraged. There is a need as well to study interactions of various contaminants (both organic and inorganic) with palygorskite-containing soil clays.