The effect of nanoclays (modified Laponite and Cloisite) on the dynamic modulus, dynamic viscosity, and relaxation time of thermoplastic polyurethane (TPU)-based nanocomposites is studied by using the dynamic mechanical rheometer in strain, temperature, frequency sweeps, and stress relaxation experimental modes. Cloisite 20A preferentially associates to the soft domains and dodecyl amine-modified Laponite RD favors the hard domains of the TPU, whereas cetyl trimethyl ammonium bromide-modified Laponite RD does not show any preference and gets distributed both in the hard and soft domains randomly. Cloisite-based nanocomposites, having longer diskette size, possess greater dynamic modulus and viscosity than Laponite-based ones. The change in modulus and viscosity of the nanocomposites over the range of frequencies registers a completely different behavior at different temperature regimes depending on the size of diskettes of the nanoclays and their distribution (before and after the softening of the hard domains). Addition of clay is found to increase the elastic component of stress relaxation of the TPU at 120A degrees C. This behavior is more prominent in the case of Cloisite-based nanocomposites as compared to their Laponite-based counterparts. The morphology correlates well with the dynamic rheological properties of these nanocomposites.