A novel pillared clay, i.e. pillared montmorillonite with crystallized TiO₂, has been developed as a highly active photocatalyst. The TiO₂ pillars in pillared montmorillonite were crystallized to anatase by hydrothermal treatment, while the porosity of the pillared clay was retained. The size of the crystallized TiO₂ pillars and the average pore diameter showed good agreement, and both sizes could be controlled in the range ca. 40–90 Å by changing the treatment conditions. The photocatalytic properties of the TiO₂ pillars were investigated in the degradation of trichloroethylene in water. The hydrothermal crystallization enhanced the catalytic activity both per unit weight of TiO₂ and per exposed unit surface area of TiO₂. The catalytic activity of the TiO₂ pillars was also enhanced by quantum-size effects: as the TiO₂ pillar size decreased, the pillared montmorillonites exhibited higher catalytic activity and showed larger blue-shifts in their UV absorption spectra.