Unmodified and modified natural rubber latex (uNRL and mNRL) were used to prepare thermoplastic starch/natural rubber/montmorillonite type clay (TPS/NR/Na+-MMT) nanocomposites by twin-screw extrusion. After being dried, the nanocomposites were injection molded to produce test specimens. Scanning electron micrographs of fractured samples revealed that chemical modification of NRL enhanced the interfacial adhesion between NR and TPS; improving their dispersion. X-ray diffraction (XRD) showed that the nanocomposites exhibited partially intercalated/exfoliated structures. Surprisingly, transmission electron microscopy (TEM) showed that clay nanoparticles were preferentially intercalated into the rubber phase. Elastic modulus and tensile strength of TPS/NR blends were dramatically improved from 1.5 to 43 MPa and from 0.03 to 1.5 MPa, respectively, as a result of rubber modification. Properties of blends were almost unaffected by the dispersion of the clay except for the TPS/mNR blend loading 2% MMT. This was attributed to the exfoliation of the MMT.