Polycarbonate nanocomposites were prepared using two different twin screw extruders from a series of organoclays based on sodium montmorillonite, with somewhat high iron content, exchanged with various amine surfactants. It seems that a longer residence time and/or broader residence time distribution are more effective for dispersing the organoclay. The effects of organoclay structure on color formation during melt processing were quantified using colorimeter and UV-Vis spectroscopy techniques. Color formation in the PC nanocomposites depends on the type of organoclay and the type of pristine clay employed. Double bonds in the hydrocarbon tail of the surfactants lead to more darkly colored materials than saturated surfactants. The most severe color was observed when using a surfactant containing hydroxyethyl groups and a hydrocarbon tail derived from tallow. Molecular weight degradation of the PC matrix during melt processing produces phenolic end groups which were tracked by UV-Vis spectroscopy. Greater dispersion of the clay generally led to higher reduction in molecular weight due to the increased surface area of clay exposed; however, for color, the situation is far more complex. Hydroxy-ethyl groups and tallow unit on the surfactant lead to more degradation. A selected series of organoclays based on synthetic clay Laponite(R)\) and calcium montmorillonite from Texas (TX-MMT) were also prepared to explore the effects of the clay structure. Laponites and TX-MMT produce less color formation in PC nanocomposites than montmorillonite probably due to lower content of iron. Dynamic theological properties support the trends of molecular weight degradation and dispersion of clay. (C) 2003 Elsevier Ltd. All rights reserved.