We used molecular dynamics simulations and experiments to study the rheology of polymerclay nanocomposite hydrogels. The molecular dynamics simulations studied the formation of physical cross-linked networks as a function of the clay concentration. Simulations showed that while the local structure changed from isolated polymerclay clusters to a percolating network with increasing clay concentration the networks were only able to sustain stress at concentrations of roughly 1.5 times the percolation transition. Experiments using poly(N-isopropylacrylamide) (PNIPA)clay nanocomposites at different clay concentrations were compared with simulation results. Experiments showed a transition from viscous to gel like behavior at a clay concentration of 15.24g/L, in good agreement with simulations. The modulus, G' and G '', prior to yield was observed to increase exponentially with clay concentration and G' at yield could be fitted to the modified Mooneys equation.