Nanocomposites of polyurethane-montmorillonite (PU-MMT) were successfully prepared by in situ emulsion polymerization. The PU-MMT particles size in emulsion was controlled in nanolevel, which was confirmed by laser scattering size distribution analyzer. The morphology of MMT in PU-MMT composites was observed by transmission electron microscopy (TEM). Wide angle x-ray diffraction (WAXD) was also used to detect the dispersion of MMT in composites. The thermal property was evaluated by dynamic mechanical analysis. Mechanical and fracture properties were also been tested. Gas barrier property was discussed on the basis of testing oxygen permeability of PU-MMT films. The permeability coefficient of the films is found to reduce after composing with MMT, which indicates that the potential application of PU-MMT could be realized as coating materials to prevent metal rusting. It is also found that dimethyl distearylbenzyl ammonium chloride (DMDSBA) is a better modifier for MMT in PU than dimethyldistearyl ammonium chloride (DMDSA). (C) 2009 Wiley Periodicals, Inc. J Appl Polym Sci 114: 1964-1969,2009