Thermoplastic vulcanized (TPV) nanocomposites were prepared in a laboratory mixer using EPDM, polypropylene of different viscosities, maleic anhydride modified polypropylene, an organo-clay, and a sulfur-based curing system. Based on the obtained results from X-ray diffraction, transmission electron microscopy (TEM), scanning electron microscopy (SEM), differential scanning calorimeter, and mechanical properties, the microstructure of the prepared nanocomposites was found to be sensitive to the viscosity difference between the two phases and the clay content. X-ray diffraction and TEM images of the TPV nanocomposites showed that clay was nearly exfoliated and randomly distributed into the polypropylene phase. The SEM photo micrographs of The dynamically vulcanized thermoplastic elastomer samples showed that the rubber particles were dispersed through the polypropylene in form of aggregates and their size increased with the introduction of clay. The nanoscale dimensions of the dispersed clay resulted in a significant improvement of the tensile modulus of the TPV nanocomposite samples, from 20 to 90% depending on clay content and the viscosity ratio of PP/EPDM. In the PP nanocomposites, the clay layers act as nucleating agents, resulting in higher crystallization temperature and reduced degree of crystallinity. Moreover, the oxygen permeability in the TPV nanocomposites was found to be lower than in unfilled but otherwise similar materials.