Porous mullite ceramics having needle-shaped interlocking microstructure have been developed from China clay with hydrated aluminium fluoride (AlF₃.3H₂O) or anhydrous AlF₃. The mullite phase evolution, microstructure and the reaction mechanism in both the systems have been compared. In the presence of anhydrous AlF₃, needle-shaped mullite crystals grow mainly by the decomposition of topaz crystals, which are formed during the intermediate stages of sintering. Whereas in the case of hydrated AlF₃ samples, the presence of water vapour and HF generated in the reaction zone help in direct nucleation of mullite crystals without the formation of topaz. However, in the powder mixture containing clay and 40 wt.% AlF₃.3H₂O, the mullite nucleation happens from the topaz decomposition also, resulting in high mullitisation overall. Mullite crystals formed from the 40 wt.% AlF₃.3H₂O and clay have good needle-shaped interlocking microstructure, and can be used as a better alternative for anhydrous AlF₃ to reduce the cost.