We report the dielectric constant and transport mechanism of intercalated nanoclaypolyaniline composite, an industrially ready to use novel nanocomposite, which is prepared by a simple mechanochemical method. The effects of clay concentration on structure and structure variations on properties were characterized by Fourier transform infrared spectroscopy, X-ray diffraction, scanning electron microscopy, transmission electron microscopy, thermogravimetric analysis, and impedance spectroscopy (20 Hz1 MHz and temperature range from 300-380 K). The phenomenon of percolation was observed in these composites. The values of Motts temperature, density of states at the Fermi level, hopping distance, and barrier height for polyanilinenanoclay (PANC) composites were calculated. By applying Motts theory, it is found that the PANC composites obey the one-dimensional variable range hopping mechanism. This type of percolated sample can be used as a nanocapacitor in many devices because of its enhanced transport properties.