To improve the dispersion stability of attapulgite (ATT) in epoxy (EP), acrylic resin (AC) containing trimethoxysilyl and carboxyl was employed to form a covalent link between attapulgite and epoxy. The rod-like attapulgite was first efficiently activated by means of removing the adsorbed water to release the structural channels under reflux and subsequently functionalized by the bifunctional acrylic resin obtaining grafting efficiency as high as 11 wt %. The improvement of the hydrophobic nature of attapulgite was demonstrated by the fact that the contact angle of organically modified attapulgite (108.6 circle) was much higher than that of the pristine attapulgite (29.9 circle). Modified attapulgite exhibited homogeneous dispersion in epoxy matrix in forms of monodispersion or agglomeration by several nanorods. Compared to pristine epoxy, AC-ATT/EP nanocomposites containing only 3 wt % AC-ATT exhibited a significantly increase of 128.9% in storage modulus. In addition, the nanocomposites exhibited remarkable enhancement in the impact strength, Youngs modulus, and the tensile strength relative to the pristine epoxy.