Montmorillonites (MMTs) intercalating a potassium persulfate initiator were readily exfoliated in the presence of polymerizing methyl methacrylate during soap-free emulsion polymerization. Because of the confined space, the polymerizing chains were aggregated into a disk form inside the clay interlayer regions for micellation. It was surprising to find from X-ray diffraction analysis that the exfoliation of MMT was almost completed in the micellation stage. Further polymerization afforded latex particles of exfoliated poly(methyl methacrylate) (PMMA)-MMT nanocomposites. In addition, two kinds of MMT nanosheets were collected by the removal of PMMA with toluene: One was a single-layer nanosheet with a thickness of 1.25 nm, and the other was a stacked sheet with an average thickness of 7.5 nm that may have consisted of six individual layers. Electron diffraction analysis revealed that if the individual layer of an MMT nanosheet were not a single crystal, it should contain an ultrathin layer of ice with a commonly occurring hexagonal phase. (c) 2006 Wiley Periodicals, Inc.