Abstract: Polytetrafluoroethylene (PTFE) is a smooth symmetrical linear polymer consisting of repetitive units of tetrafluoroethylene. PTFE has low friction coefficient, good heat resistance and corrosion resistance, and plays an important role in aerospace, industrial production, medical and other fields. However, due to its poor mechanical properties. Filling modification, as a method that can effectively improve the performance of composite materials, is widely used to enhance the performance of PTFE-based composites. Iron oxychloride (FeOCl) has similar properties to traditional van der Waals layered materials. It has a special layered structure, belongs to the orthorhombic system, and accumulates in the form of distorted octahedron. Due to its electrochemical properties and the unique structural configuration of the iron atoms in it, ferric chloride oxide is commonly used as a cathode material and catalyst in batteries. At present, there are few studies on the application of ferric chloride in the field of tribology, and most of the studies on the improvement of tribological properties of polymer matrix composites are carried out under dry friction conditions, while the tribological properties of polytetrafluoroethylene composites under paraffin oil lubrication are scarce. Therefore, in this paper, FeOCl was prepared by microwave method as a modified additive, and PTFE-FeOCl composites were prepared by cold pressing and hot burning process with PTFE as the polymer matrix. The structural morphology and elemental composition of FeOCl were analyzed by SEM and EDS. The results showed that the surface of FeOCl presents a layered structure with a size of 1~4 μm, which was consistent with the structural morphology of two-dimensional layered nanomaterials. The diffraction peaks appeared at θ = 11.18°, 26.15°, 35.39°, which corresponded to the (010), (110), (021) crystal planes of FeOCl; the results proved that the two-dimensional layered FeOCl was successfully synthesized. The hardness of PTFE-FeOCl composites was tested by Shore hardness tester. The analysis showed that the addition of FeOCl significantly increased the hardness of the composites and inhibited the fracture and slip of the PTFE molecular chains. The friction and wear test were evaluated by MM-2HL friction and wear tester under liquid paraffin lubrication. The results showed that the tribological properties of PTFE composites were improved by adding different mass fractions of FeOCl. The PTFE composites with 5% FeOCl showed excellent tribological properties under different loads. This was because the adsorption of FeOCl particles on PTFE and its anchoring effect on the friction pair promote the formation of the transfer film. The transfer film can avoid the direct contact between the composite material and the metal pair, thereby reducing the wear of the composite material. The formation of transfer film is promoted by the adsorption of FeOCl particles on PTFE and the anchoring effect on friction pairs; the appearance of transfer films can avoid direct contact between the composite and the metal counterpart, thereby reducing the wear of the composite. In addition, theoretical calculations verify the adsorption actions between PTFE and FeOCl and the calculation result of adsorption energy is negative (−0.014 Ha). Paraffin wax was added as lubricating medium, and the theoretical calculation was carried out by simplifying the model. The calculation results showed that the formed transfer films still had certain adsorption effect with the metal counterpart (adsorption energy, −0.297 Ha); this means that after the addition of liquid paraffin, a layer of oil film will be formed on the dual surface due to its adsorption with the metal counterpart, and paraffin will not become a factor that causes the transfer film to fall off from the metal dual surface. This study is helpful for the development of PTFE-based new functional materials for various applications.