Nanoclays have been successfully introduced into the asphalt binder, either separately or into the polymer modified asphalt binder resulting in the improved mechanical and rheological properties of the asphalt binder. The present research study was undertaken to evaluate the influence of organically modified montmorillonite clay (OMMT) in pure asphalt binder and also in styrene butadiene styrene (SBS) modified asphalt binder. The quantity of OMMT and SBS was varied from 2-6 percent by the weight of the base asphalt binder. The addition of OMMT in an appropriate amount can dramatically enhance the compatibility between SBS and base asphalt. It was observed from the results that modified binders exhibited higher Superpave rutting parameter (G*/sinδ) indicating an improvement in the stiffness of the binder. It was also observed that modified binders (OMMT/SBS) does not exhibit phase separation under high temperatures. Thus high temperature stoage stability could be improved by choosing a proper amount of OMMT and forming an exfoliated structure. Thus it can be concluded that OMMT added to the polymer modified binder (SBS) helps in obtaining better physical and rheological properties on a condition that clay scatters into the binder at the nanoscopic level.