Ab initio total energy pseudopotential calculations were performed on 2:1 dioctahedral smectite to rationalize an understanding of the structure and energetics for the same and to correlate catalytic activity of clay materials with layer charge. We have chosen two clay members from the 2:1 dioctahedral smectite family-(1) beidellite and (2) montomorillonite-to monitor the effect of negative charge on the location of interlayer cation. Local softness calculation using Fukui functions generated for clusters derived from the structures of the clay matrixes in the domain of the hard-soft acid-base (HSAB) principle were performed first to locate the active site in clay. Ab initio calculations were followed to determine the most feasible orientation of the single interlayer water molecule in hydrated montmorillonite and beidellite. The role of hydroxyl hydrogen attached with the bridging oxygen connected to octahedral aluminum was also monitored. It is observed that interlayer cation (Na+) has a lesser influence on hydrogen bond formation in the presence of single water molecule. The Na+ locates closer to the substituted octahedral site of 2:1 dioctahedral smectite. Now, to monitor the effect of negative charge on the location of interlayer cation, the two structures chosen were compared. A novel method to correlate catalytic activity of clay with layer charge has been formulated.