The effect of clay concentration on the oxygen permeability and optical properties of a modified poly(vinyl alcohol) (PVOH) was studied. Sodium montmorrilonite (MMT-Na+), at a concentration of 10 wt %, was found to decrease the oxygen permeability of the PVOH below 0.001 cc . mil/m(2)/day at 55% relative humidity. This low permeability is attributed to the strong interaction between PVOH and clay, as evidenced by an increase of more than 10degreesC in the glass transition temperature at this concentration. Transmission electron microscopy images show the high level of clay exfoliation that results from the strong affinity to PVOH. Haze and clarity were optical properties that changed significantly with increasing clay concentration. These values were 0.4 and 100%, respectively, in the absence of clay, but became 80 and 23% with 10 wt % MMT-Na+. Transmission did not change as considerably, reaching a low of 73%, with a clay concentration of 10 wt %. The ability to reduce the oxygen permeability of PVOH-based systems at elevated humidity may prove advantageous for applications in food and flexible electronics packaging, where moisture sensitivity currently prevents them from being used. (C) 2004 Wiley Periodicals, Inc.