Bentonite contains negative ions, which bind with positively charged ions in wine. Once this happens, a heavier solid is formed, which then sinks to the bottom of the container. Bentonite is unique in that it can be added either at the beginning of the wine making process, or when fermentation has been completed.
When added at the beginning of the wine making process bentonite first settles to the bottom of the fermentation container. When the turbulence of fermentation begins, carbon dioxide gas bubbles form, and grab the bentonite. The bubbles lift the bentonite up to the top of the fermentation container, attracting positively charged solids as it rises. The bubbles burst when they reach the surface, and the bentonite particles fall to the bottom again, gathering even more positively charged solids as they sink. This continues throughout the fermentation process, and allows bentonite to collect dead yeast and other particles as they are produced. By the time you are ready to rack the wine, there is a large amount of sediment and dead yeast gathered in the bottom of the primary fermentation container.
Bentonite can also be added after fermentation, and many home wine makers prefer this method. The bentonite particles will still sink to the bottom, but will not rise again unless you stir the wine yourself. Therefore, if you choose to add bentonite as your clarifying agent after stabilizing, you should stir vigorously three times each day to degas the wine, and bentonite will be more effective. Even so, during post-fermentation, there are more effective fining agents from which to chose; hence the clarifying agent most kits provide such as kieselsol/chitosan or isinglass.