A new model is presented which can describe quantitatively the small angle neutron scattering from montmorillonite-type clay dispersions and polymer-clay nanocomposites. The model is shown to be able to describe well the data from a series of dilute montmorillonite in water dispersions in which the deuterium content of the water phase is varied. The fits combined with information from other techniques suggest strongly that H–D exchange occurs in the montmorillonite-water dispersions. Deviations from Q−2 behaviour often observed experimentally for clay dispersions are convincingly explained by the presence of a small proportion of tactoids.