Aromatic-aliphatic polyamide/clay nanocomposites were produced using solution intercalation technique. Surface modification of the clay was performed with ammonium salt of aromatic diamine and the polyamide chains were produced by condensation of 4-aminophenyl sulfone with sebacoyl chloride (SCC) in dimethyl acetamide. Carbonyl chloride endcapped polymer chains were prepared by adding extra SCC near the end of polymerization reaction. The nanocomposites were investigated for organoclay dispersion, water absorption, mechanical, and thermal properties. Formation of delaminated and intercalated nanostructures was confirmed by X-ray diffraction and TEM studies. Tensile strength and modulus improved for nanocomposites with optimum organoclay content (8 wt %). Thermal stability and glass transition temperatures of nanocomposites increased relative to pristine polyamide with augmenting organoclay content. The amount of water uptake for these materials decreased as compared with the neat polyamide. (c) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 112: 3141-3148, 2009