The potential of the layered gadolinium hydroxide (LGdH) [Gd2(OH)5]Cl·yH2O (LGdH-Cl) for simultaneous drug delivery and magnetic resonance imaging was explored in this work. Three non-steroidal anti-inflammatory drugs (diclofenac [dic], ibuprofen [ibu], and naproxen [nap]) were intercalated into LGdH-Cl for the first time, using three different routes (ion exchange intercalation, coprecipitation, and exfoliation-self-assembly). X-ray diffraction, elemental microanalysis and IR spectroscopy confirmed successful incorporation of the drug into the interlayer spaces of the LGdH in all cases. From a comparison of the guest anion sizes and interlayer spacings, the active ingredients are believed to adopt intertwined bilayer configurations between the LGdH layers. The materials prepared by coprecipitation in general have noticeably higher drug loadings than those produced by ion exchange or self-assembly, as a result of the incorporation of some neutral drug into the composites. The LGdH-drug intercalates are stable at neutral pH, but rapidly degrade in acidic conditions to free Gd3+ into solution. While LGdH-nap releases its drug loading into solution very rapidly (within ca. 1.5 h) at pH 7.4, LGdH-dic shows sustained release over 4 h, and LGdH-ibu extends this to 24 h. The latter composites therefore can be incorporated into enteric-coated tablets to provide sustained release in the small intestine. The drug intercalates are highly biocompatible and retain the proton relaxivity properties of the parent LGdH-Cl, with the materials most promising for use as negative contrast agents in MRI. Overall, the LGdH-drug intercalation compounds appear to have great potential for use in theranostic applications.