A highly dispersed montmorillonite (MMT)/styrene-butadiene rubber (SBR) nanocomposite is prepared by combining the latex compounding method and spray-drying process. The MMT layers exhibit a nearly exfoliated structure in the spray-dried powder. But when subjected to strains higher than 40%, the sprayed powdered nanocomposite goes through an irreversible transformation of the MMT network, showing a dramatic decrease in the storage modulus. XRD, SEM, and high resolution transmission electron microscopy results confirm the structure transformation of the MMT/SBR nanocomposite during processing. With intensive shearing during milling, the MMT layers are oriented, and further aggregations are observed in the vulcanizate. The processing procedures greatly alter the structures of the MMT/SBR nanocomposite. (c) 2013 Wiley Periodicals, Inc. J. Appl. Polym. Sci., 2013