An inverted emulsion pathway polymerization method was introduced to synthesize conducting polypyrrole (PPy) into the layer of inorganic clay within a nanolevel, using dodecylbenzenesulfonic acid (DBSA) as both an emulsifier and a dopant. The synthesized PPy/Na+-montmorillonite (MMT) nanocomposite was confirmed to have a layered structure with a folded or penetrated PPy from X-ray diffraction, and it was further characterized via FT-IR spectroscopy. Four probes method was adopted to examine electrical DC conductivity. Electrorheological (ER) behavior of the nanocomposite dispersed in silicone oil was also investigated using a rotational rheometer equipped with a high voltage generator.