The methanol dehydration reaction was studied over environmentally benign, easily accessible and inexpensive K10 montmorillonite clay used as the catalyst at a temperature range between 200–700 °C. Nearly 100% selectivity towards dimethyl ether (DME) at 80% methanol conversion was observed at 300 °C. However, upon heating, the selectivity shifted and the catalyst produced formaldehyde as well as an almost 1:1 M ratio of methane and carbon monoxide at 700 °C. Calcination at 300 °C increased the catalyst acidity due to desorption of chemisorbed water, thereby enhancing the methanol conversion to form DME. Higher calcination temperatures negatively affected the catalyst structure and, therefore, its activity. Catalyst characterization by means of X-ray Diffraction (XRD), X-ray Photoelectron Spectroscopy (XPS), Diffuse Reflectance Infrared Fourier Transform Spectroscopy (DRIFTS), and solid-state Nuclear Magnetic Resonance (MAS NMR) spectroscopy, revealed that the calcination temperature affected the near surface Si/Al ratio as well as the surface hydroxyl groups. It was concluded that the density of the surface Brønsted acid sites is directly proportional to methanol conversion to DME.