The dispersion of MMT-Na+ (montmorillonite) layers in a chitosan polymer matrix, using the homogenization, was performed. The effect of shear rate was characterized on the mechanical, barrier, and structural properties of nanocomposites. Elongation at break (EAB) was unaffected by shear rate, which decreased after homogenization, increased above 13,000 rpm, however, tensile strength (TS) dramatically increased up to 59 MPa at 16,000 rpm. Water vapor permeability (WVP) and oxygen permeability (OP) of the homogenized nanocomposite decreased more than that of untreated nanocomposite and OP was not significantly changed above 16,000 rpm of shear rate. XRD result and TEM images indicated that three types of tactoids, exfoliation, and intercalation were generated and the largest distance of 18.87 angstrom between MMT-Na+ layers was produced at 16,000 rpm. The results indicate that homogenization was a beneficial method for effectively dispersing MMT-Na+ layers in a chitosan polymer matrix and that a shear rate of 16,000 rpm was the effective condition. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 119: 2742-2749, 2011