In this paper, a PEO-clay(PVP) nanocomposite was designed and the nanocomposite film was produced. The film exhibits a low thermal expansion coefficient of similar to 10 ppm/degrees C, which is similar to that of metals. The film also exhibits an unexpected high heat distortion temperature, which is much higher than the melting point of polyethylene oxide (PEO), as well as a much improved O-2 barrier property, high stiffness, and high strength. The significant property improvements are related to the structure of the formed composite. In this composite, the clay crystal is first intercalated by polyvinyl pyrrolidone (PVP), which regulates the stacking of the clay sheets and forms a well-ordered intercalated clay crystal. This intercalated clay crystal directs the crystallization and crystal orientation of the PEO in the composite. The property change with the amount of clay added suggests that there is a critical clay loading of similar to 10 vol % beyond which the polymer based composite exhibits superior properties.