Polymer nanocomposites (PNCs) of poly(3-hexylthiophene) (P3HT) with organically modified montmorillonite (om-MMT) clay have been prepared by the solvent casting method. WAXS and TEM studies indicate exfoliated clay structure for lower clay content, but at higher clay content (5%, w/w) intercalated structures appear. The interchain lamella of P3HT exists in the nanocomposite, and the P3HT crystals become more ordered, showing better X-ray diffraction peaks. The thermal stability of PNCs increases significantly, and 1% clay content PNC exhibits the maximum thermal stability. The glass transition temperature (T-g), beta-transition temperature (T-beta), the melting point (T-m), and the enthalpy of fusion (DeltaH) of the PNCs are increased as compared to those of pure P3HT. The storage modulus (G') of PNCs showed a dramatic increase from that of pure P3HT, and the increase is larger in the temperature range 20-50 degreesG. The FTIR study indicates a decrease in Si-O-Si and Si-O stretching frequency for the exfoliated clay structure. The UV-vis study showed a blue shift of the pi-pi* transition band of P3HT in the PNCs, and they exhibit photoluminescence quenching which increases with increase in clay concentration. The dc conductivity of undoped PNCs remains almost the same as that of pure P3HT, but iodine-doped PNCs, however, exhibit 2.5-3 times greater conductivity than that of iodine-doped P3HT.