Poly(ethylene terephthalate) ionomer (PETI)/organically-modified montmorillonite clay (OMC) nanocomposites were prepared via melt extrusion. Sulfonated PET containing various incorporations of ionic comonomer and clay modifications were investigated. The random incorporation of ionic functionalities along the PET backbone enhances interactions between the matrix polymer and montmorillonite clay resulting in the creation of polymer-clay nanocomposites exhibiting a predominately exfoliated morphology. The morphology is correlated with mechanical properties and crystallization behavior. It is found that incorporation of clay into the random ionomers leads to increased mechanical properties and slower crystallization rates. (c) 2005 Elsevier Ltd. All rights reserved.