Synthetic nanofluids are produced by expensive and complex procedures which hinders their large-scale application in thermal systems. In this study the montmorillonite clay as a natural nanostructure material with a high dispersion ability has been introduced for achieving low cost and eco-friendly water-based green nanofluid. For this purpose, a set of montmorillonite nanofluids (MMTNFs) with different weight fractions of 0.2, 0.4, 0.6, 0.8, and 1% was mechanically prepared. The concentration-dependent properties of the samples including stability, thermal conductivity and viscosity were experimentally evaluated. The results indicated that MMTNFs were accompanied by a primary instability, but they gradually possessed excellent long-term stability. Adding montmorillonite to the water could enhance thermal conductivity up to 8.3%, which is worth with considering the naturalness, abundance and low-cost of this clay. MMTNFs exhibited excellent thermal performance when utilized as a working fluid instead of the pure water in a plate heat exchanger (PHE). The results showed that the best performance of PHE was obtained at an optimum MMT concentration (0.6 wt%). At optimal condition, the overall heat transfer coefficient, heat transfer rate, and thermal efficiency improved 27.25%, 17.65%, and 7.82%, respectively.