Nanocomposites of polystyrene (PS) with up to 20 wt% organoclay were prepared by melt compounding in a co-rotating, intermeshing twin-screw extruder. Three grades of PS with different molecular weights were used. In this paper we discuss preparation and characterization of the mixtures. Residence time and its distribution were measured by ultrasonics (US). They were found to be independent of the PS grade, but the US attenuation and sound velocity varied with the organoclay loading. According to the XRD diffraction data, the organoclay was dispersed into two types of platelet stacks evidenced by the diffraction peaks at about 2theta = 2.1 and 5.5degrees, i.e., with the interlayer spacings of d(001) = 4.20 and 1.6 nm, respectively. Since neat organoclay has d(001) = 1.93 nm, the first peak indicates intercalation by PS and the other a collapse of the interlamellar gallery during compounding. The XRD spectra depended on the organoclay content, but not on PS grade. According to TEM analysis, the degree of intercalation of organoclay in the polymer matrix is highest for the low-molecular-weight polystyrene. TEM results also confirm the collapse of interlamellar spacing in parts of the samples. FT-IR spectroscopy showed that there was some thermal degradation of the onium compound present in the nanoclay. (C) 2004 Society of Plastics Engineers.