Novel surfactant immobilized-Mn (VII) and -Cr (VI) nano-dispersed in the interlayer of smectite clays are used for the first time in the oxidation of organic molecules. Oxidation of benzyl alcohol to its aldehyde was used as a model reaction to test the activity of these interlayer clays. The nano-dispersed interlayer manganate and chromium species were not only able to oxidize benzyl alcohol to benzaldehyde but also showed higher yields and better regeneration characteristics than ion-exchanged smectites impregnated with Mn (VII) and Cr (VI) species. The latter showed a sharp decrease in the activity after regeneration while the surfactant immobilized nano-dispersed samples retained their activities for oxidation of benzyl alcohol even after several regenerations. It is seen that the active species responsible for oxidation within the interlayer are the oxides of Mn (IV) and Cr (III) which are held in the interlayer region firmly and are not easily leached out. However, in the case of impregnated catalysts leaching of the active species was found to be easy. Thus the bentonites with surfactant immobilized nano- dispersed interlayer-species are novel catalysts and offer the possibility of their utility as recyclable clays and could be advantageously used in organic oxidations.