Fracture properties and deformation mechanisms of nanoclay-reinforced maleic anhydride-modified polypropylene (MAPP) were investigated. Elastic-plastic fracture mechanics was employed to characterize the toughness in light of substantial postyield deformation for the reinforced MAPP. Upon introduction of 2.5 wt % clay loading in maleated MAPP, it was observed that tensile strength, modulus, and fracture initiation toughness concomitantly increased substantially. Continued increase in clay loading thereafter only led to stiffening and strengthening effects to the detriment of fracture toughness. A plot of the J-integral initiation fracture toughness versus the plastic zone size demonstrated that toughening arose from plastic deformation in the reinforced matrix. Careful examination of deformed tensile specimens using small angle X-ray scattering (SAXS) showed 2.5 wt % clay gave rise to the highest equatorial scattering, which indicates the presence of microvoids in the matrix. The SAXS results were consistent with that shown in subcritically loaded crack-tip deformation zone using transmission electron microscopy. Thus, both macroscale three-point bend fracture data and SAXS results led us to consistent findings and conclusions. Further increase in clay loading above 2.5 wt % reduced the scattering the matrix plasticity and thus the fracture toughness. (C) 2004 Wiley Periodicals, Inc.