In most contemporary life forms, the confinement of cell membranes provides localized concentration and protection for biomolecules, leading to efficient biochemical reactions. Similarly, confinement may have also played an important role for prebiotic compartmentalization in early life evolution when the cell membrane had not yet formed. It remains an open question how biochemical reactions developed without the confinement of cell membranes. Here we mimic the confinement function of cells by creating a hydrogel made from geological clay minerals, which provides an efficient confinement environment for biomolecules. We also show that nucleic acids were concentrated in the clay hydrogel and were protected against nuclease, and that transcription and translation reactions were consistently enhanced. Taken together, our results support the importance of localized concentration and protection of biomolecules in early life evolution, and also implicate a clay hydrogel environment for biochemical reactions during early life evolution.