Exfoliated modified-poly(2,6-dimethyl-1,4-phenylene oxide) (MPPO)/Clay nanocomposites were successfully prepared via blending with clay in which polystyrene was anchored. The clay dispersion was quantified by both X-ray diffraction (XRD) and transmission electron microscopy (TEM). They showed enhanced thermal stability, as measured by thermogravimetric analysis (TGA), relative to commercial MPPO without clay, even when as little as 0.1 wt% of clay was added. However, the glass transition temperature decreased with increasing the clay content. The mechanical property of MPPO/Clay nanocomposite was found to exhibit increased tensile strength behavior with increasing clay content.