A process for preparing organoclays as thixotropic agents to control the rheology of water-based paints and other aqueous and polar-organic systems. The process relates to treating low-grade clay ores to achieve highly purified organoclays and/or to incorporate surface modifying agents onto the clay by adsorption and/or to produce highly dispersed organoclays without excessive grinding or high shear dispersion. The process involves the treatment of impure, or run-of-mine, clay using an aqueous biphasic extraction system to produce a highly dispersed clay, free of mineral impurities and with modified surface properties brought about by adsorption of the water-soluble polymers used in generating the aqueous biphasic extraction system. This invention purifies the clay to greater than 95%.