A hydrothermal reaction which dissolves the amorphous silica and the crystalline silica impurities contained in a recovered, naturally occurring montmorillonite clay, and subsequently converts the dissolved silicas into a dioctahedral and/or trioctahedil smectite clay. The dissolution of silica is accomplished by adjusting the pH of an aqueous slurry of the recovered clay to a value of about 8.5 to about 10.0, preferably about 9.0 to about 9.5, at a temperature of at least about 150.degree. C., preferably about 180.degree. C. to about 250.degree. C., more preferably about 190.degree. C. to about 235.degree. C. Dissolved silica reacts with stoichiometric amounts of aluminum and/or magnesium and/or sodium added to the slurry, while at a temperature of at least about 150.degree. C., preferably about 185.degree. C. to about 250.degree. C., and at a pressure of at least about 200 bars, to synthesize a dioctahedral smectite clay from the dissolved silica; or the dissolved silica reacts with stoichiometric amounts of lithium and/or magnesium and/or sodium added to the slurry, at the same conditions, to form a trioctahedral smectite clay.