Attempts have been made to modify the properties of the injection processing-scraped PET (denoted as RPET) via intercalation with different levels of organically modified nanoclay (montmorillonite) by melt blending in a corotating twin screw compounder. The clay platelets dispersion state has been qualitatively correlated with the melt linear viscoelastic as well as tensile and barrier properties of the prepared nanocomposites. Oxygen permeation of the nanocomposite PET films showed significant reduction compared with the pristine PET polymer. All the PET/nanoclay composites exhibited no bacterial growth, with no potentiality to generate acetaldehyde, as measured by GC/Mass analyzer. X-ray diffractometry and transmission electron microscopy performed on the scraped PET/organoclay nanocomposite samples showed increase in d(001) spacing of the clay layers and their dispersion throughout the PET matrix. Differential scanning calorimetry analysis showed higher crystallization temperature as well as crystallization enthalpy (Delta H-c,) for the nanocomposite samples, compared with the unprocessed virgin PET. The RPET nanocomposite samples composed of 3 and 5% of nanoclay exhibited enhanced melt elastic modulus and pseudosolid-like behavior at low shear frequencies measured by rheomechanical spectroscopy than the unfilled pristine-scraped PET, indicating the formation of nanoscopic network structure by the clay platelets, which leads to the development of nanostructured resin. (C) 2007 Wiley Periodicals, Inc.