Hydroxyl-terminated poly(dimethylsiloxane) cured by a mixture of methyl tris (methyl ethyl ketoxime) silane and 3-aminopropyl triethoxy silane system is known for satisfactory mechanical properties and chemical resistance. The effect of nanoclay on this poly(dimethyl siloxane) (PDMS) system is explored in this study. Organically modified clay (montmorillonite) nanocomposites of PDMS were processed by solution blending followed by cross linking. The effect of nanoclay content on the mechanical, barrier, thermal and dynamic mechanical properties of the nanocomposites were investigated in detail. X-ray diffraction studies reveal exfoliated nature of the nanoclay layers in the composites. The mechanical properties, such as tensile strength and elongation at break of PDMS, improved substantially on reinforcement with nanoclay. The maximum enhancement in properties occurred at a nanoclay content of 2-3%. Cross-link density increased with increase in nanoclay concentration up to 3% and decreased with further addition. The barrier properties were not significantly altered by the incorporation of nanoclay. Initial decomposition temperatures marginally increased at lower loading levels of nanoclay, whereas a reverse trend is observed at higher loadings. The glass transition temperature remains practically the same for all the compositions. The study demonstrates that nanoclay addition is an effective method for improving the properties of PDMS.