This paper aims to clarify the calculation of effective phase volume fractions in polymer-clay nanocomposites so that conventional composite theory for the volume fraction dependencies of properties can be applied. In this way, such nanocomposites, which are treated as a separate class of composites, can be brought under the umbrella of general composite theory so that property predictions and formulation decisions can have a wider theoretical base. Intercalation results in the expansion of the dispersed phase and absorption of the continuous phase so that the reinforcing unit is itself a composite. In exfoliation, a high surface area of dispersed phase is presented to the continuous phase with consequences for adsorption and immobilization. Many nanocomposites are a mixture of these two modes for which a theoretical expression is also needed.