It has recently been shown that the intercalation and subsequent in situ polymerization of organic monomers within the interlayer of clay minerals yields nanocomposites with novel material properties. We present results of plane-wave density functional theory (DFT) based investigations into the initial stages of the polymerization of methanal and ethylenediamine within the interlayer of sodium montmorillonite. Nucleophilic attack of the amine on the aldehyde is only observed when the aldehyde is protonated or coordinated to a metal ion. No evidence is found for the dissociation of water in the hydration sphere of the sodium counterions. The Bronsted acidity of the hydroxyl groups present in the silicate layers is significantly affected by their proximity to sites of isomorphic substitution. However, the most obvious Bronsted acid sources are shown to be unlikely to catalyze the reaction. Instead catalysis is shown to occur at the clay mineral lattice-edge where hydroxyl groups and exposed aluminum ions act as strong Bronsted and Lewis acid sites, respectively.