The possibility of simultaneous peroxide-initiated grafting of MAH (maleic anhydride) onto EPDM (ethylene-propylene-diene terpolymer) and EPDM/clay nanocomposite synthesis by the solution and melt process is investigated. Montmorillonite organoclay is used. Maleation efficiency is investigated by infrared spectroscopy. Clay exfoliation and the resulting nanocomposite properties are determined by X-ray diffraction and dynamic mechanical analysis, respectively. Simultaneous grafting and exfoliated nanocomposite synthesis can be carried out in solution and melt. The use of optimal amounts of initiator and MAH is very important. High peroxide initiator concentration causes extensive EPDM crosslinking and scission reactions. High concentration of MAH deteriorates clay exfoliation in melt because of reduced shearing due to MAH addition. The use of low MAH concentration is a straightforward solution if the extent of MAH grafting onto EPDM is not considerably impaired. To overcome this problem, a two step melt compounding process is suggested and tried out. (C) 2012 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013