Thirty-three polystyrene (PS)/acrylonitrile-butadiene-styrene (ABS) and high impact PS/ABS polymer blends with organoclay and copolymer additives were prepared by melt processing using different mixing sequences in order to test the putative capability of clay to perform a compatibilizing role in polymer blends. In general, the addition of clay increased the tensile modulus and had little effect on tensile strength. For the blends studied in this work, the addition of organoclays caused a catastrophic reduction in impact strength, a critical property for commercial viability. The polymer-blend nanocomposites adopted a structure similar to that for ABS/clay nanocomposites as determined by X-ray diffraction and transmission electron microscopy. It is suggested that clay reinforcement inhibits energy absorption by craze formation and shear yielding at high strain rates. Simultaneous mixing of the three components provided nanocomposites with superior elongation and energy to failure compared to sequential mixing. The clay pre-treated with a benzyl-containing surfactant gave the best overall properties among the various organoclays tested and of the two clay contents studied 4 wt % was preferred over 8 wt % addition. (C) 2011 Wiley Periodicals, Inc. J Polym Sci Part B: Polym Phys 49: 443-454, 2011