This work seeks to optimize the twin-screw compounding of polymer-clay nanocomposites (PCNs). Proportional amounts (3:1) of maleic anhydride functionalized polypropylene compatibilizer (PP-g-MA) and organically modified montmorillonite clay at clay loadings of 1, 3, and 5 wt% were melt-blended with a polypropylene (PP) homopolymer using a Leistritz Micro 27 twin-screw extruder. Three melt-blending approaches were pursued: (1) a masterbatch of PP-g-MA and organoclay were blended in one pass followed by dilution with the PP resin in a second pass; (2) all three components were processed in a single pass; and (3) uncompatibilized PP and organoclay were processed twice. Both corotation and counterrotation operation were utilized to investigate the effect of screw rotation mode and sequence on organoclay exfoliation and dispersion. X-ray diffraction was employed to characterize basal spacing; however, since rheology is known to be highly sensitive to mesoscale organoclay structure, it is an ideal tool to examine the relationship between the various processing methods and exfoliation and dispersion. A holistic analysis of rheological data demonstrates the efficacy of the masterbatch approach, particularly when compatibilizer and organoclay are blended in counterrotating mode followed by dilution with matrix polymer in corotating mode.