In this study, we report that intercalation of tin into montmorillonite clay (Sn‐MMT) boosts catalytic activity for the synthesis of polyoxymethylene dimethyl ethers, a promising diesel fuel additive. This increase in activity is attributed to the formation of a hierarchical catalyst displaying high surface area with accessible Brønsted and Lewis acid sites. Extensive characterization such as MAS‐NMR, XRD and in‐situ DRIFTS confirmed that tin insertion induced reorganization of the clay layers into a disorganized house‐of‐cards structure. It also revealed that tin resided between the clay layers as defective SnO2 nanocrystals stabilized by the negative charge of MMT. The source of acidity in Sn‐MMT was studied by comparing it with two similar materials, namely Sn(OH)4, and thermally treated Sn‐MMT. Low activity measured for isolated hydroxylated SnO2 nanoparticles illustrates the importance of having clay and tin in close proximity. Meanwhile, deactivation upon thermal treatment occurred via sintering of the tin phase and diffusion of the protons inside the layers. Sn‐MMT acidity is attributed to the combination of Si−OH−Al groups, formed as a by‐product of SnO2 crystallization, and undercoordinated Sn surface sites, stabilized by the negative charge of MMT.