The modulus-volume fraction relationship for a poly(c-caprolactone)-montmorillonite nanocomposite follows composite materials theory provided the clay Volume fraction is correctly calculated. Thus, for interpretation of mechanical properties, nanocomposites do not have to be treated as a separate class of material. The tensile modulus of biodegradable poly(epsilon-caprolactone) was increased by 50% at 8 wt % clay addition (as corrected for surfactant), but the more dramatic improvement was in tensile elongation at break which increased from 165% to 550% for additions of up to 10 wt % clay. Poly(c-caprolactone) nanocomposites with various clay volume fractions were produced with two organo-modified montmorillonites. Untreated montmorillonite was used as an experimental control to compare the properties with a conventional composite over the same clay volume fraction range, The composites were confirmed and characterized by XRD, DSC. NMR, and TEM.