The exfoliation mechanism and thermal-mechanical properties of surface-initiated epoxy nanocomposites were studied. Time-resolved high-temperature X-ray diffraction, DSC, and isothermal theological analyses revealed that the interlayer expansion mechanism might be separated into three stages. These stages relate to the initial interlayer expansion, the steady-state interlayer expansion, and the cessation of interlayer expansion. It was found that differences in the activation energies of interlayer expansion and of curing influence the final nanostructures of the materials. The thermal-mechanical properties of the nanocomposites were studied using dynamic mechanical thermal analysis. Variations in ultimate properties were attributed to the formation of an interphase layer, where the interphase is hypothesized to be the epoxy matrix plasticized by surfactant chains.