Phenolic resin-layered silicate nanocomposites (PLSNs) were synthesized by melt intercalation with linear novolac resin (P1) and organosilicates such as montmorillonite modified by benzyldimethyloctadecylammonium. (C18BM) and by bis(2-hydroxy-ethyl)methyl tallow ammonium (THEM). The PLSNs were prepared by a sequential process (IC) in which phenolic resin was melt-intercalated into organosilicate and subsequently cured with hexamethylenetetramine (HMTA). It was found from X-ray diffraction measurements that P1THEMIC nanocomposites showed better silicate dispersion than did P1C18BMIC nanocomposites, even though both systems had intercalated morphologies. The larger silicate gallery expansion in P1THEMIC nanocomposites was attributed to the strong hydrogen-bonding interaction between the phenolic resin and hydroxyl groups of the organic modifier of THEM. As they had better silicate dispersion, the P1THEMIC nanocomposites showed better mechanical properties than the P1C18BMIC nanocomposites. The thermal stability of the P1THEMIC nanocomposites was slightly increased or decreased, depending on the silicate content, relative to the neat phenolic resin. (C) 2003 Wiley Periodicals, Inc.