Natural rubber (NR)-montmorillonite (MMT) nanocomposites were prepared by a novel in situ organomodified and latex compounding method, followed by melt compounding technique. Effects of cationic surfactant on MMT dispersion, curing characteristic, mechanical, and dynamical properties were investigated. The number of layers in the layered MMT stack was determined by Small-Angle X-Ray Scattering (SAXS). The dispersion of MMT tends to form high ordered structure in NR-MMT masterbatch when cationic surfactant of more than 4 phr was used. The morphology of Na-MMT shows partly intercalated and exfoliated structure in the matrix after mixing and hot pressing process with reduced number of layers compared to the pristine MMT. The use of cationic surfactant over 4 phr introduces a plasticizing effect resulting in the reduction of crosslink density, hardness and modulus, but increase in tensile strength due to higher interfacial adhesion between NR and MMT as determined by Maeir-Goritz model and Field Emission Scanning Electron Microscopy (FESEM). The optimum cationic surfactant loading is observed at 4 phr with the highest stable bonds, which result in the highest crosslink density, tear strength and storage modulus while the lowest Payne effect and tan delta at 60 degrees C. POLYM. ENG. SCI., 59:1830-1839, 2019. (c) 2019 Society of Plastics Engineers