This article provides a broad overview on the natural polymer-based bio-nanocomposite properties, processing and application. Bio-nanocomposites prepared with natural biopolymers, such as starch and protein, can be formed using a melt intercalation or a solvent intercalation method. Incorporation of layered silicates into the biopolymer matrices results in improved mechanical properties, water vapor barrier properties, and thermal stability of the resulting bio-nanocomposites without sacrificing biodegradability due to their nanometer size dispersion. Consequently, even though natural polymer-based bio-nanocomposite is in its infancy, it has a huge potential in the future.