Clay Ball

Clay is the item received after mining clay blocks. These clay balls can be placed in a furnace to make clay bricks or recombined back into blocks for storage or building purposes. Mining a clay block yields 4 clay, which can be placed back together, much like Snow (Block). Clay can be found near water and it looks similar to stone but with a softer and a lighter look.

Crafting
Clay can be placed in a furnace to create clay bricks. These bricks then can be crafted into brick blocks.

Storage
Four clay can be combined back into a clay blocks for storage or building purposes.

Trivia

 * Prior to the Beta 1.2 update, clay was considered rarer than diamond because it generated in fair sized clumps few and far between.