Intercalation of guest species into layered inorganic solids is a method of producing ordered inorganic-organic assemblies with unique microstructures controlled by host-guest and guest-guest interactions. Smectite clay minerals, such as montmorillonite, having appropriate functional molecules in between the silicate layers are supposed to exhibit a wide range of novel characteristics. Nanocomposite material based on maleic anhydride-grafted polypropylene and dye-modified layered silicate was developed. Characteristics of organo-modified montmorillonite particles and polymer/clay hybrids have been investigated through FTIR, SAXS, DSC, UV measurements, and transmission electron microscopy. The results of the intercalation process, structural characterization, and thermal properties will be discussed in comparison with the intercalation and nanocomposite preparation results. The intercalation was successfully conducted by the ion-exchange method. It was shown that intercalated dibenzilidene acetone type chromophores exist in the clay galleries in an aggregated form, probably as J-aggregates. This feature strongly effects on optical and nonlinear optical properties of nanocomposites. (c) 2005 Wiley Periodicals, Inc.