A novel polybenzoxazole (PBO)/clay nanocomposite has been prepared from a PBO precursor, polyhydroxyamide (PHA) and an organoclay. The PBO precursor was made by the low temperature polycondensation reaction between isophthaloyl chloride (IC) and 2,2-bis(3-amino-4-hydroxyphenyl)hexafluoropropane with an inherent viscosity of 0.5 dl/g. The organoclay was formed by a cation exchange reaction between a Na+-montorillonite (Na+-Mont) clay and an ammonium salt of dodecylamine. The PHA/clay was subsequently thermal cured to PBO/clay. Both X-ray diffraction and transmission electron microscope analyzes showed that the organoclay was dispersed in the PBO matrix in a nanometer scale. The in-plane coefficient of thermal expansion (CTE) of PBO/clay film decreased with increasing amounts of organoclay. The CTE of PBO/clay film containing 7 wt% clay was decreased by 21% compared to the pure PBO film. Both of the glass transition temperature (T.) and the thermal decomposition temperature of PBO/clay increased with increasing amounts of organoclay. The thermal decomposition temperature and the T-g of PBO/clay containing 7 wt% clay increased to 12 and 16 degreesC, respectively.