A polyethylene terephthalate (PET)-based nanocomposite was prepared by using nanoclay-polyacrylic acid gel (nanoclay-PAA gel) as a reinforcing filler. For nanoclay-PAA gel, the cation-exchange method was used to prepare an organoclay from bentonite clay and hexadecyl trimethylammonium chloride. The organoclay was then dispersed in isopropanol, mixed with PAA gel (PAA powder swollen in water at room temperature to 1 wt%) under mechanical stirring, and neutralized with Triethanolamine (TEA). X-ray diffraction (XRD) showed an increasing of basal spacing and the intercalated structure of nanoclay gel was also found. The good distribution of organoclay in gel matrix were revealed with scanning electron microscope (SEM). PET/Clay nanocomposites with various inorganic clay contents (1, 2, 3, 4 and 5 wt%), were then prepared via melt mixing in a twin screw extruder. PET/Clay nanocomposites structure, phase morphology, thermal and mechanical properties of PET/Clay nanocomposites were investigated by XRD, SEM, differential scanning calorimetry (DSC), Thermo gravimetric analyzer (TGA) and universal testing machine, respectively. The results reveals the exfoliated and intercalated structures of nanoclay in PET/Clay nanocomposites, the improvement of thermal properties and the increasing of crystallinity, leading to the enhancement of mechanical properties. [DOI: 10.1380/ejssnt.2015.107]