The gelation mechanism of poly(N-isopropylacrylamide) -clay nanocomposite gels (NC gel) was investigated by dynamic light scattering (DLS) and contrast variation small-angle neutron scattering (SANS). It was found that the gelation mechanism of NC gels is similar to that of conventional gels made with organic cross-linker (OR gels). Namely, time-resolved DLS measurements captured all of the characteristic features of gelation at the threshold. This indicates that the gelation of NC gels is also classified to an ergode-nonergode transition. However, the size of the clusters at the gelation threshold is much larger than that of OR gels. This results in a significant depression of optical transmittance exclusively at the gelation threshold for NC gels. Partial scattering functions, i.e., two self-terms Spp(q) and Scc(q) and the corresponding cross-term Scp(q), were obtained by contrast-variation SANS, where P and C denote polymer and clay, respectively, and q is the magnitude of the scattering vector. The detailed analysis of Spp(q), Scc(q), and Scp(q) indicates that (i) each clay platelet is surrounded by polymer layers, (ii) the volume fraction of the polymer layer per clay platelet is independent of the concentrations, and (iii) the correlation length of the network polymer decreases with increasing clay concentration. These results confirm that the screening length of the system is influenced by the concentrations of clay platelets as well as of polymer chains, and the local structures of polymers near clay platelets are similar between in a sol state near the gelation threshold and in bulk NC gels.