In this study, a modified montmorillonite (W-H-OMMT) was prepared by intercalating pristine montmorillonite using a phosphorus salt and a subsequent grafting using a long-alkyl-chain silane, and the nanocomposites with poly[styrene-(ethylene-co-butylene)-styrene] (SEBS) were prepared by melt blending. The pristine and the modified MMT were characterized by XRD, FT-IR, XPS and SEM. The morphology of the SEBS nanocomposites was studied using XRD, SEM and TEM, and the results can be correlated well with transparency, color, surface contact angle, rheological behavior, thermal and mechanical properties of the nanocomposites. As compared with pristine and the modified clay, more uniform dispersion and improved compatibility are observed for the W-H-OMMT in the SEBS matrix, resulting in better transparency and more hydrophobic surface for the SEBS/W-H-OMMT nanocomposite. Better thermal stability, a synergetic effect in tensile strength and elongation at break were observed, which can be attributed to well dispersion of the W-H-OMMT, as well as perfect adhesion between the W-H-OMMT and the SEBS matrix from the enhanced molecular interaction between the long-alkyl chain and the SEBS molecules. Compared to pure SEBS, the strength and elongation of SEBS/W-H-OMMT nanocomposite increased by 8.5 and 7.6 %; meanwhile, the water contact angel and the 50 % weight loss temperature increased by 5.3 and 13.1 %, respectively. Appropriate silane grafted organic montmorillonite provided an efficient way for the overall performance improvement of SEBS.