In this study, we investigated the effect of organically modified nanoclay (organoclay) on the morphology of immiscible polymer blends (PBT/PE) with various compositions of PBT ranging from 1 to 90 wt%. When a small amount of organoclay between 1 and 3 phr is added to the blend, the thin clay tactoids of the thickness of the order of 10 nm are located at the interface between PBT and PE phase. As its content is increased, the additional organoclay positions in a specific component depending on its affinity with the component. The addition of a small amount of organoclay results in the effective size reduction for PBT/PE blend. The organoclay located at the interface forms the interfacial phase with a non-homogeneous distribution of clay along the interface and changes the interfacial tension, which result in the coalescence suppression of the droplets. Rigid organoclay with a high aspect ratio allows the blend morphology with long-term thermal stability by suppressing the Brownian motion. This ability of the organoclay to suppress the coalescence of the droplets effectively reduces the droplet size. On the other hand, additional organoclay results in the theological properties of particular component being increased, which means the change in the viscosity ratio. The change in the viscosity ratio, together with the coalescence suppression effect, affects the determination of he droplet size, depending on he location of the organoclay. Therefore, the organoclay suppresses the coalescence of the droplets at the interface, while simultaneously influencing the breakup of the droplets due to the change of viscosity ratio. (c) 2006 Elsevier Ltd. All rights reserved.