It is known that particular types of semi-crystalline/elastomer polymer blends exhibit shape memory effects (SME) due to the dispersion of two immiscible phases. In this study, the crystal structure of polylactic acid (PLA)/ thermoplastic polyurethane (TPU) based shape memory polymer (SMP) is altered by incorporating small amounts of montmorillonite (MMT) nanoclay. The results indicate the incorporation of MMT can improve the compatibility of the two different polymers. Moreover, the presence of MMT affects the total crystallinity of the SMP and improves mechanical properties. Lastly, uniaxial stretching deformation can be applied to the SMP at room temperature conditions while maintaining its shape memory properties. With 1 wt % MMT particles, the recovery ratio (Rr) was nearly 95%, which indicated a strong recovery effect. The shape-fixing ratio (Rf) remained above 95% for all composites due to plastic deformation applied at room temperature. (c) 2017 Wiley Periodicals, Inc. J. Polym. Sci., Part B: Polym. Phys. 2017, 55, 1197-1206