Zr-pillared clays were prepared from ZrOCl2 pillaring solutions by adopting different preparative conditions. Ce3+ ions are introduced to Zr-pillared clays by co-intercalation method. The resulting samples were characterized by XRD, TGA, N2 sorption and UV-VIS-Diffuse reflectance spectroscopy techniques. Basal spacings in the range of 18-21 Å were observed depending upon the preparative condition. TG analysis shows three weight loss regions corresponding to removal of various types of water molecules. All pillared clays show Type-I sorption isotherm typical of microporous materials. Pillaring under refluxing condition is found to have beneficial effect on the surface area and pore volume of the Zr-pillared clay. The chemical environment and location of Ce3+ ions is studied by UV-VIS-DRS. The Ce3+ ions are found to be present in the micropores of the Zr-pillared clays. However heat treatment at higher temperature may result in peripheral interaction between Ce3+ ions and Zr-pillars. Catalytic activity of these pillared clays was evaluated for cyclohexanol dehydration which correlates well with the Brønsted acidity of these materials. The Zr-Pillared clay containing Ce3+ ions show good catalytic activity and stability with reaction time which has been ascribed to the stabilazition of the Brønsted acidic centers.