New polylactide (PLA)/layered silicate nanocomposites have been prepared successfully by simple melt extrusion of PLA and organically modified montmorillonite. The d spacings of both the organically modified montmorillonite and intercalated nanocomposites were investigated by wide-angle X-ray diffraction (WAXD) analysis, and the morphology of these nanocomposites was examined by transmission electron microscopy (TEM). Using oligo(E-caprolactone) (o-PCL) as a compatibilizer, the effect of compatibilizer in nanocomposites was investigated by focusing on two major aspects: morphological analysis and mechanical property measurements. The intercalated nanocomposites exhibited remarkable improvement of materials properties in both solid and melt states as compared to that of PLA matrices without clay.