Montmorillonite (Mt) can readily undergo spontaneous delamination or exfoliation into nanolayers by various physical and chemical processes, which allow various strategies to engineer hierarchical functional inorganic-organic nanostructures. This review aims to discuss the recent progress in the liquid-phase exfoliation of Mt into individual nanolayers and the inclusion chemistry of functional organic species, ions, or molecules into the exfoliated Mt nanolayers to produce hierarchical functional inorganic-organic nanostructures. The exfoliation methods include mechanical force, ultrasonication, and intercalation-assisted exfoliation. Techniques for quickly assessing the quality of the exfoliated Mt nanolayers are still needed. Layer-by-layer (LbL) deposition, template, and evaporation-induced inclusions are examined to fabricate hierarchical Mt-organic species nanocomposites with unique functionalities and properties. The nanocomposites can be produced as multilayered porous films, brick-and-mortar coatings, hydrogels with a house-of-cards structure, core-shell materials, and hollow and mesoporous spherical nanocomposites, which exhibit significant potential for adsorption, catalysis, targeted delivery and controlled drug release, highly sensitive sensors, flame retardant coatings, and thermal energy storage and release (i.e. phase change materials). Finally, the challenges and prospects for the future development of hierarchical nanocomposites of exfoliated Mt nanolayers and organic species, particularly in hierarchical supramolecular nanostructured composites, are highlighted.