Poly(ethylene terephthalate) (PET)/Cloisite 30B (C30B) nanocomposites containing different concentrations of the organoclay were prepared using two different twin-screw extrusion processes: conventional melt mixing and water-assisted melt mixing. The reduction of the molecular weight of the PET matrix, caused by hydrolysis during the water-assisted extrusion, was compensated by subsequent solid-state polymerization (SSP). X-ray diffraction, scanning electron microscopy, and transmission electron microscopy analyses showed intercalated/exfoliated morphology in all PET/C30B nanocomposites, with a higher degree of intercalation and delamination for the water-assisted process. Rheological, thermal, mechanical, and gas barrier properties of the PET nanocomposites were also studied. Enhanced mechanical and barrier properties were obtained in PET-C30B nanocomposites compared to the neat PET. The nanocomposites exhibited higher tensile modulus and lower oxygen permeability after SSP. The elongation at break was significantly higher for SSP nanocomposites than for nanocomposites processed by conventional melt mixing. (C) 2013 Society of Plastics Engineers