Clay mineralogy and diagenesis affect the reservoir quality of the Neogene Surma Group in the Hatiya trough of Bengal Basin, Bangladesh. X-ray diffraction and scanning electron microscopic analyses of diagenetic clay minerals from Shahbazpur#2 well reveal that on average illite is the dominant clay mineral (50%), followed by chlorite (24%), kaolinite (23%) and smectite (2.50%). The absence of smectite at Core-2 (3259.80 m to 3269 m) results from the total transformation of smectite to illite owing to burial depth and high K–feldspar. The diagenetic changes are a result of chemical processes such as cementation, chlorite authigenesis, dissolution, alteration and replacement that have significantly affected the reservoir properties. Cementation plays an important role in reducing reservoir properties with pore and fracture filling cement. The relative percentage of illite and smectite minerals (>90% illite in I/S mixed layer) and Kübler index value (0.34° to 0.76° Δ2θ) indicate a diagenetic zone with subsurface temperatures of 120–180 °C in the studied samples. The temperature range determined using clay percentages and the Kübler index as a geothermometer is supported by observed diagenetic features such as quartz overgrowths, smectite to illite transformations and chlorite coatings. The diagenetic features cause variable reservoir porosity and permeability that are critical in planning exploration and development programs of this field or analog fields across the Bengal Basin.