The influence of nano-scale particles on the viscoelastic properties of polymer suspensions is investigated. We have developed a simulation technique for the particle orientation and polymer conformation tensors to study various features of the suspensions. The nano-particles are modeled as thin rigid oblate spheroid particles and the polymers as FENE-P type viscoelastic and Newtonian fluid. Both interparticle and polymer-particle interactions have been taken into account in our numerical computations. The nonlinear viscoelastic properties of nanocomposites of layered silicate particles in non-Newtonian fluids are examined at the start-up of shear flow and are interpreted using the model to examine the effects of model parameters as well as flow conditions on particle orientation, viscosity, and first normal stress difference of the suspensions. We have studied the microstructure of polymer-clay nanocomposites using X-ray diffraction (XRD) scattering and transmission electron microscopy (TEM). The rheology of these nanocomposites in step-shear is shown to be fairly well predicted by the model. (C) 2010 Wiley Periodicals, Inc. J Polym Sci Part B: Polym Phys 48: 2003-2011, 2010