The interaction of multivalent rare earth cations with clay minerals is of importance for the design of new materials based on layer silicates. The effect of thermal and hydrothermal treatments upon the local structure around lutetium ions intercalated within the interlamellar space of montmorillonite has been studied by X-ray absorption spectroscopy (EXAFS). The initial Lu(III) hydrate (7.7 Lu-O at 2.30 Angstrom), formed after the ion exchange process, loses one water molecule after air-heating at 300 degrees C (6.5 Lu-O at 2.29 Angstrom) and is fully disrupted by air heating at 500 degrees C. After this treatment oxide- and hydroxide-type environments are detected, characterized by higher shells (Lu-Lu at 3.3 Angstrom and Lu-O at 4.1 Angstrom) and distortions in the first Lu-O contribution (5.9 Lu-O at 2.22 Angstrom). At 700 degrees C the transformation concerns all lutetium atoms that now show the oxide structure (5.4 Lu-O at 2.22 Angstrom and 2.8 Lu-Lu at 3.33 Angstrom), The spectra recorded after thermal treatment at higher water vapor pressure (100 atm) can be well fitted with only three shells corresponding to the disilicate phase. It is concluded that the local structure around interlamellar Lu(III) changes from that of the hydrate, in the untreated sample, to that of the disilicate, the latter quantitatively and at a temperature of 400 degrees C, This temperature is considerably lower than the lowest one previously reported (900 degrees C). EXAFS, frequently used in other fields, has been shown as a unique technique to study the evolution of intercalated Lu(m), thus complementing the results obtained by other techniques in previous studies.