This paper describes a multiscale approach used to model polymer clay nanocomposites (PCNs) based on a new altered phase concept. Constant-force steered molecular dynamics (SMD) is used to evaluate nanomechanical properties of the constituents of intercalated clay units in PCNs, which were used in the finite element model. Atomic force microscopy and nanoindentation techniques provided additional input to the finite element method (FEM) model. FEM is used to construct a representative PCN model that simulates the composite response of intercalated clay units and the surrounding polymer matrix. From our simulations we conclude,that, in order to accurately predict mechanical response of PCNs, it is necessary to take into account the molecular-level interactions between constituents of PCN, which are responsible for the enhanced nanomechanical properties of PCNs. This conclusion is supported by our previous finding that there is a change in crystallinity of polymeric phase due to the influence of intercalated clay units. The extent of altered polymeric phase is obtained from observations of a zone of the altered polymeric phase surrounding intercalated clay units in the "phase image" of PCN surface, obtained using an atomic force microscope (AFM). An accurate FEM model of PCN is constructed that incorporates the zone of the altered polymer. This model is used to estimate elastic modulus of the altered polymer. The estimated elastic modulus for the altered polymer is 4 to 5 times greater than that of pure polymer. This study indicates that it is necessary to take into account molecular interactions between constituents in nanocomposites due to the presence of altered phases, and furthermore provides us with a new direction for the modeling and design of nanocomposites.