In this study, sodium montmorillonite (Na-MMT) was successfully modified by using n-hexadecyl trimethyl ammonium bromide (CTAB) via cationic exchange to obtain an organophilicmontmorillonite (CTAB-MMT). The Na-MMT, CTAB-MMT, and a commercial montmorillonite, that is, Cloisite15A were incorporated into gellan gum (GG) hydrogel and their mechanical, physical, thermal properties, biocompatibility, and antibacterial activities were investigated. The mechanical performance results show that the GG hydrogels containing Cloisite15A required smallest volume to achieve optimum compression stress, modulus, and compression strain at 5% (w/w) compared to both Na-MMT and CTAB-MMT at 10% (w/w). Swelling ratio of GG hydrogels increased upon addition of MMT, and water vapor transmission rate (WVTR) values of all hydrogels were in the range of 1106-1890 g m −2 d −1 , which were comparable to WVTR values of commercial wound dressings. Thermal behavior shows that the inclusion of Cloisite15A in GG hydrogel improved the thermal stability than its counterparts. Cell studies exhibit that the GG incorporated with Na-MMT is non-cytotoxic to human skin fibroblast cells (CRL2522), and in contrast, the GG hydrogels incorporated CTAB-MMT and Cloisite15A revealed that the cells were dying and the cell growth depleted after being cultured for 72 h. Qualitative antibacterial study revealed that GG hydrogel containing CTAB-MMT only in the sample exhibits inhibition against the Gram-positive bacteria, that is, Staphylococcus aureus and Bacillus cereus, while there was no inhibition exhibited against Gram-negative bacteria (Escherichia coli and Klebsiella pneumoniae).