Abstract: A colloidal clay is prepared by initially slurrying a clay material with water, heating the slurry, and commingling the slurry with steam to pressurize the slurry and hydrate the clay. Thereafter the pressurized slurry is rapidly expanded, as by jetting to an area of lesser pressure, to cause at least some colloidal particles to be formed of the clay. Next, and preferably, the clay is held in a holding zone for a time and at a temperature and pressure sufficient to optimize the formation of colloidal particles of the clay material. Thereafter, the colloidal particles are separated from the non-colloidal particles. The colloidal particles of clay so formed may be reacted with an "onium" base material to form a colloidal organophilic clay material useful as a gelling and/or suspension agent.