Hybrid epoxy nanocomposites modified with carboxyl-terminated butadiene acrylonitrile (CTBN) rubber and organoclay were synthesized. The morphology of those nanocomposites was studied with X-ray diffraction (XRD), Atomic Force Microscopy (AFM) and Scanning Electron Microscopy (SEM). The results showed that most of the organoclay in the nanocomposites was exfoliated and high cure temperatures benefit the formation of exfoliated nanocomposites. Organoclay simultaneously improved fracture toughness, compressive modulus, yield strength and ultimate strength of the epoxy resin. Organoclay not only enhanced T-g, yield strength and ultimate strength of rubber-modified epoxies, but also further improved their fracture toughness. There was a superposition effect on fracture toughness of the hybrid epoxy nanocomposites modified with both rubber and organoclay. (C) 2004 Society of Plastics Engineers.