The development and commercialization of nanoclays (NCs) offers new possibilities to tailor adhesives on the nanoscale range. Three types of functionalized nanoclays were included in the current study, two novel ones and one commercial nanoclay. The novel ones were based on aminosilane and amidoamine hyperbranched polymer, and the commercial nanoclay possessed hydroxyl functionality. All the three functionalities were expected to react with the polyurethane (PU) based thermoset adhesive. Fourier transform infrared (FT-IR) spectroscopy was used to follow the disappearance of the isocyanate group of the polyurethane thermoset adhesive. Thermomechanical properties were studied using dynamic mechanical analysis (DMA). Shear and peel properties of adhesively-bonded joints were evaluated using the appropriate test standards. Atomic force microscopy (AFM) was used to analyze the nanoscale morphology of cryogenically fractured surfaces. DMA measurements indicated that the glass transition temperature (T-g) of neat PU was 32 degrees C. Incorporation of nanoclays in concentrations of 1, 3 and 5 wt% affected the glass transition temperature significantly. The functionalized nanoclays increased the T-g gradually to the range of 60 to 62 degrees C for 5 wt% loading. The incorporation of functionalized nanoclays into PU improved the shear strength by 170, 160 and 195% for the hydroxyl-, aminosilane- and hyperbranched-treated NCs, respectively. The functionalized nanoclays exhibited higher peel strength compared to the neat PU by 30% for the hydroxyl modified clay and by 40% for aminosilane-modified clay (at 1 wt% concentration) and almost no change for the hyperbranched modified one. AFM analysis indicated that different fracture mechanisms occurred with respect to the type and concentration of nanoclay used.