Truly nanocomposite materials that are stable to about 400 to 700 °C can be prepared by intercalating oxides or metal clusters of about 0.4 to 2.0 nm in between approximately 1.0 nm layers of smectite clays. Both the chemistry and size of intercalates (pillars) can be varied to introduce unique catalytic, molecular sieving, dehumidifying and adsorption properties in these materials. The intercalated clays also provide opportunities to prepare compositionally and stoichiometrically diverse nanocomposite precursors to high temperature structural and electronic ceramics. Although montmorillonite is the most widely used host, further designing in properties can be achieved by using other members of smectite family having subtle crystal chemical and compositional variations, such as beidellite, nontronite, saponite or hectorite. The sol-gel chemistry involving the preparation of positively charged mono- or multiphasic solution-sol or colloidal-sol particles is a viable approach to introduce chemically diverse oxide particles in the interlayers of smectite. Reduction of transition metal ions or complexes in the interlayers of smectite to zerovalent metal clusters/particles using polar liquids is another novel approach to develop catalytically active, high surface area materials.