Poly(ethylene terephthalate-co-ethylene naphthalate) (PETN) nanocomposites containing two different organoclays, Cloisite 20A and 30B, were prepared by melt intercalation using an extruder. The organoclays was treated with epoxy monomer to further improve the polar interactions with PETN matrix. The morphological, thermal-mechanical, mechanical and gas barrier characteristics of the nanocomposite's were evaluated using several characterization tools. It is found that the Cloisite 30B had better interactions with PETN and was more uniformly dispersed within PETN than Cloisite 20A. Epoxy treatment of Cloisite 30B organoclay resulted in improvements in d-spacing between silicate layers, thermo-mechanical and tensile properties, as well as thermal stability, processing and gas barrier characteristics of the PETN/30B nanocomposites. These results suggest that the epoxy acted as the compatibilizer as well as the chain extender, improving the chemical interactions between PETN and organoclay, while discouraging the macromolecular mobility of polymer chains in the vicinity clay particles. The implications and the mechanisms behind these observations are discussed. (c) 2005 Elsevier Ltd. All rights reserved.