Catalytic hydrotreatment of methylcyclohexane was investigated as a model for upgrading of coal-derived naphthenes to isoparaffinic structures with synthetic clay catalysts. Nickel-substituted synthetic mica montmorillonite (NiSMM), alumina-pillared NiSMM, and zirconia-pillared NiSMM were prepared and tested for hydrocracking and hydroisomerization of methylcyclohexane. Total acidity and surface area increased with pillaring of NiSMM with polyoxyaluminum and polyoxyzirconium cations. Catalytic reactions of the methylcyclohexane gave high conversions of the substrate to aliphatic hydrocarbons. Most of the products were branched alkanes (isoparaffins). These compositions are highly desirable for environmentally acceptable transportation fuels. Dehydrogenation was not a major pathway, as indicated by the minimal formation of aromatic hydrocarbons, coke, or other oligomeric materials. This paper describes the effect on the product distribution of various operating conditions, which included reaction temperature, contact time, hydrogen pressure, and catalyst.