In diagenetic solutions, ammonium may be incorporated into smectites as an exchangeable cation and become fixed within the interlayer space of illites and other white micas. To study the potential impact of NH4+ on the smectite-to-illite transformation reaction, a series of hydrothermal experiments were carried out at 100, 150 and 200 °C, spanning reaction duration from 15 to 90 days, and two NH4+ concentrations (0.1 and 0.2 M). The solids resulting from these alteration experiments were characterized using X-ray diffraction (XRD), Fourier-transform infrared spectroscopy (FT-IR), and transmission and analytical electron microscopy (TEM and AEM). The XRD analysis revealed that, under the specified experimental conditions, smectite incorporates NH4+ in the structure, leading to the formation of non-swelling layers, resulting in partial transformation to illite layers and producing packets of disordered illite/smectite (I/S). In addition, a minor XRD peak at ~10 Å suggests the formation of discrete illite crystals. The FTIR spectra demonstrated the uptake of NH4+, with deformation bands observed at 1400 and 1430 cm−1, corresponding to exchangeable NH4+ in smectite and fixed NH4+ in high-charge layers, respectively. TEM analysis revealed that smectite particles exhibited wavy stacks comprising a few layers with abundant defects and lateral discontinuities. The interlayer spacing in these particles ranged from 12 to 15 Å and became thinner and more plate-like with increasing temperature and time. Moreover, they contained inclusions of 10–10.3 Å layers, either as discrete layers or in packets of several layers, indicating the formation of disordered mixed-layer illite-smectite. Lateral transitions from 12 to 15 Å to 10 Å layers were frequently observed and interpreted as reaction fronts due to local rearrangement. At 150 and 200 °C, isolated packets of 10 Å layers were identified as discrete illite crystals that precipitated directly from solution. Analysis of the chemical composition of individual particles revealed an increase in octahedral charge (MgVI for AlVI substitution) in smectite particles, followed by increase in tetrahedral charge in I/S particles. Interlayer NH4+ played a stabilizing role in the high-charge layers and favored the smectite-to-illite conversion process.