Aluminium pillared montmorillonite catalyst was prepared by interlaying of Na-montmorillonite with aluminium hydroxy cations. Intercalation produces an expanded clay with increase in surface area and acidity. Spectroscopic studies with chemisorbed pyridine and ammonia have: shown that the interlayered clay contains both Lewis and Bronsted acid sites. The DSC thermograms of pyridine and ammonia adsorbed catalysts show the existence of three acidic sites with different strength on the surface of the catalyst. Methanol dehydration to hydrocarbons, cracking of cumene and isopropylation of benzene on the aluminium pillared Montmorillonite have also been investigated and correlated to the acidity.