Preparation of novel sulphated zirconia pillared montmorillonite and saponite clays nanoparticles (SZ/MMT and SZ/SAP) were studied to find a highly active, economist and environment friendly catalysts in the conversion of citronellal into menthol. Sulphated zirconia pillared MMT was prepared by direct sulphation into zirconia pillared MMT, which is a new and fast technique. Comparative study also conducted by evaluating the activity of SZ/MMT with sulphated zirconia nanoparticle (SZ). Material characterisation was performed by X-ray diffraction, Brunauer–Emmett–Teller surface area analysis, scanning electron microscope and also surface acidity by mean pyridine adsorption Fourier transform infrared analysis and total acidity by butylammine titration. Catalytic activity of both SZ/MMT and SZ/SAP was observed in a reaction of citronellal conversion. The operation parameters consist of technique of reaction; tandem cyclisation–hydrogenation and catalytic hydrogen transfer mechanism were investigated. The results show that the pore size of catalyst and the presence of surface acidity affect significantly to increase the isomerisation as well as hydrogenation mechanism. The catalytic hydrogen transfer over microwave irradiation was observed as the more efficient process compared to the tandem cyclisation–hydrogenation from the selectivity of the product and also the other factor influencing the surface mechanism. In another aspect, the results clearly indicated the reusable properties of the sulphated zirconia pillared clay catalysts under varied conditions. Correlation between physicochemical characters and the reaction mechanism is discussed in this study.