Soft and transparent polymer-clay nanocomposites (see figure), consisting of hydrophobic poly(2-methoxyethyl-acrylate) and hydrophilic inorganic clay, with a unique clay-network morphology have been synthesized by in situ free-radical polymerization. The nanocomposites exhibit the first observation of abnormal necking behavior accompanied by extremely large reversible elongation (1000-3000%) and excellent optical transparency, regardless of the clay content (1-30 wt %).