Biopolymer nanocomposites are of great interest to the packaging industry as they can overcome the inferior properties of biopolymers compared with synthetic polymers. However, studies on property improvement have been inconclusive about optimum filler levels and mixing conditions. This article reports on a systematic study of effect on mechanical properties of varying melt mixing conditions and filler level in PLA organoclay composites. Samples were mixed in a batch mixer at various temperatures, times, and speeds, at three filler levels. Tensile properties were measured and morphology characterized using small angle X-ray scattering (SAXS). An empirical model was used to predict the optimum mixing conditions. Samples produced at those conditions had the highest modulus of all samples, 66% higher than the average. Samples with different filler levels were made at the optimum conditions and tested for modulus and morphology. The maximum modulus, 40% higher than natural PLA, was achieved at 4 wt % filler level, and above that level modulus decreased, similar to findings in some studies but contrary to others. SAXS measurements indicated the samples had a similar intercalated morphology, so the excellent modulus results may be attributed to presence of smaller tactoids and absence of agglomerates rather than exfoliation. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 118: 1489-1493, 2010