Static light scattering measurements reveal two levels of organization, i.e., two static correlation lengths, in poly(N-isopropylacrylamide)/clay nanocomposite hydrogels prepared by polymerizing the monomer in an aqueous suspension of uniformly dispersed exfoliated clay particles. One characteristic correlation length is in the range of 200-250 nm irrespective of the preparation conditions. It is assumed to arise from a kinetically controlled rearrangement of the clay particles during the formation of the gels. The other correlation length of several tens of nanometers is in the same order of magnitude as that observed in chemically cross-linked gels and shows a similar dependence on the preparation conditions. The shear modulus of the gels rises with increasing the clay concentration and the monomer concentration. The results infer that clay particles act as multifunctional cross-links with an average effective functionality around 50. Measurements of the equilibrium swelling ratio are in agreement with this view.