Nanocomposite of thermoplastic elastomer ethylene-octene copolymer/maleated ethylene-octene (POE/POE-g-MAH) with organo-montmorillonite (OMMT, 11 wt %) as masterbatch have been obtained by melt blending and it has been characterized by transmission electron microscopy (TEM). Flame retardant POE/POE-g-MAH/OMMT/ammonium polyphosphate-pentaerythritol (APP-PER) (an intumescent flame retardant with 75 wt % ammonium polyphosphate and 25 wt % pentaerythritol) composites were prepared by using melting processing to study their structures, flame-retardancy, thermal, and mechanical properties. TEM showed exfoliated structures throughout POE/POE-g-MAH/OMMT masterbatch and POE/POE-g-MAH/OMMT/APP-PER nanocomposites. Synergistic effect was observed between OMMT and APP-PER resulting in significant improvements on thermal stability, flame-retardancy and mechanical properties in the POE/POE-g-MAH/OMMT/APP-PER nanocomposites. (c) 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013