Bentonites are considered suitable backfill material for planned underground nuclear-waste repositories because of an inherent capacity to self-seal and retain contaminants when hydrated. Barrier effectiveness, however, depends on the physical properties of bentonite after placement in a repository site, where hydration state and bulk density can vary. The objective of the present study was to investigate commercial bentonite MX80 hydration rates and mechanisms during water infiltration into dry, moist, and wet samples using the ‘wet-cell’ X-ray diffraction technique. During experimentation, water enters a small flow-through cell and induces swelling within a confined reaction volume, analogous to clay barriers in excavated underground sites. Results demonstrated the importance of using dry, well compacted (>1.4 g/cm3) bentonite, which became saturated slowly (<2.0 × 10−9 m/s) with minimal water in non-interlayer sites (external-surface sites, or within pores). The significant degree of interlayer expansion dominated by the formation of two and eventually three water layers developed as hydration clusters with greater probabilities for the same thickness to lie in adjacent interlayer sites. The relatively thicker particles and the less accessible surface area of hydrated, initially dry bentonite probably resulted in less pore-controlled diffusion, but also less potential radionuclide adsorption by surface complexation. Moist MX80 had the greatest water uptake, the smallest (1.23 g/cm3) dry bulk density, and the greatest proportion of water in pores and on external surfaces. Water that initially accumulated in pore spaces subsequently acted as a reservoir for interlayer hydration and probable gel formation in trapped voids, which is expected to occur in more loosely filled gaps within an excavated repository.