This work is aimed at determining the effect of nanoclay and polyepichlorohydrin-co-ethylene oxide (EGO) content on the microstructure and mechanical properties of PA6/ECO thermoplastic elastomers (TPEs). TPE nanocomposites were prepared in a laboratory mixer using polyamide 6 (PA6), EGO, and an organoclay by a two-step melt mixing process. First, the PA6 was melt blended with Cloisite 30B and then mixed by ECO rubber. X-ray diffraction results and transmission electron microscopy image showed that the nanoclay platelets were nearly exfoliated in both the phases. The SEM photomicrograph of PA6 with EGO showed that the elastomer particles are dispersed throughout the polyamide matrix and the size of rubber particles is less than 3 pm. Introduction of organoclay in the PA6 matrix increased the size of dispersed rubber particles in comparison with the unfilled but otherwise similar blends. The nanoscale dimension of the dispersed clay results in an improvement of the tensile modulus of the nanocomposites. POLYM. ENG. SCI., 51:278-284, 2011. (C) 2010 Society of Plastics Engineers