Biodegradable nanocomposites were successfully fabricated from cellulose acetate (CA) plasticized with triethyl citrate (TEC), and combined with Cloisite 30B organoclay, using maleic anhydride grafted cellulose acetate butyrate (CAB-g-MA) as the compatibilizer. The nanostructure of the nanocomposites was investigated by AFM, TEM, and XRD. AFM analysis clearly showed the presence of exfoliated clay platelets in the nanocomposite. Nanocomposites with 5 wt % compatibilizer contents showed better-exfoliated structure than the counterpart without compatibilizer hybrid. The clay platelet polygonal shape was observable by AFM. The exfoliated platelets were characterized to be similar to1.3 nm in thickness, similar to500 nm in width, and similar to800 nm in length. These results correspond to the XRD and TEM analysis. It was showed that the mechanical properties were improved due to good exfoliation and dispersion of clay in the plasticized CA matrix. The 5 wt % compatibilizer loading is optimum for mechanical improvement.