Developing new technologies for carbon sequestra-tion and long-term carbon storage is important. Clay minerals are interesting in this context as they are low-cost, naturally abundant, can adsorb considerable amounts of CO2, and are present in storage sites for anthropogenic carbon. Here, to better understand the intercalation mechanisms of CO2 in dehydrated and hydrated synthetic Na-fluorohectorite clay, we have combined powder X-ray diffraction, inelastic and quasi-elastic neutron scattering, and density functional theory calculations. For dehydrated Na-fluorohectorite, we observe no crystalline swelling or spectroscopic changes in response to CO2, whereas for the hydrated case, damping of the librational modes related to the intercalated water was clearly observed. These findings suggest the formation of a more disordered water coordination in the interlayer associated with highly confined water molecules. From the simulations, we conclude that intercalated water molecules decrease the layer-layer cohesion energy and create physical space for CO2 intercalation. Furthermore, we confirm that interlayer confinement reduces the Na+ hydration number when compared to that in bulk aqueous water, which may allow for proton transfer and hydroxide formation followed by CO2 adsorption in the form of carbonates. The experimental results are discussed in the context of previous and present observations on, a similar smectite, Ni-fluorohectorite, for which it is established that CO2 attaches to the edge of nickel hydroxide islands present in the interlayer.