Organo-montmorillonite (OMt) with high swellability in a hydrophobic medium such as xylene was successfully prepared. The process was realized by clean and simple modification of Ca2+-montmorillonite (Ca2+-Mt) with cetyltrimethylammonium bromide (CTAB) dispersed in very small amounts of water and ethanol. In the process, there were no needs for the steps of a Na+-exchange reaction and washing. The mechanisms of formation of OMt and its swellability in xylene were investigated. The distribution of cetyltrimethylammonium (CFA) cations and CTAB molecules adsorbed in the interlayer spaces, CTAB molecules adsorbed on the external surfaces and free CTAB molecules in the resultant OMt products was determined by the thermogravimetric (TG) and differential thermogravimetry (DIG) of the washed and unwashed OMt. The arrangement models of CTA(+) cations in the interlayer spaces were deduced from powder X-ray diffraction (XRD) patterns and Fourier transform infrared (FT-IR) spectra. The results suggested that CTA(+) cations and CTAB molecules adsorbed in the interlayer spaces and CTAB molecules adsorbed on the external surfaces of OMt played a role in the modification of Ca2+-Mt by ion exchange, hydrophobic interactions and van der Waals forces. Addition of ethanol into the preparation mixture was favorable for binding more CTA(+) cations and CTAB molecules in the interlayer spaces of OMt and enhanced dispersion of clay particles. A maximal 64.0% colloid yield in xylene for the OMt sample, which was higher than that of the commercial OMt produced by a multistep process, was achieved. The formation of good gel-like structure of OMt in xylene depended on proper distribution of CTAB molecules and CIA cations on the external and internal surfaces of OMt, ordered arrangements of CTA(+) cations in the interlayer spaces of OMt and the small sizes of dispersed OMt particles. A large volume of the networks of OMt particles in xylene was formed by edge-to-edge, face-to-face and face-to-edge between neighboring Mt particles and multifacial linking.