A new liquid-liquid method for the synthesis of epoxy nanocomposites was developed. This new method improved the dispersion and exfoliation of the organoclay in the polymer matrix, thus improving the end-use properties. The microstructure and physical properties of the clay/epoxy nanocomposite synthesized by the new method were studied. Rheological tests of the uncured epoxy-organoclay system demonstrated that this method resulted in a great increase in viscosity, much more than the most commonly used direct-mixing method. The Krieger-Dougherty model successfully described the dispersion of the clay layers in the uncured epoxy. In the 5 wt% organoclay nanocomposite, compressive tests on the cured samples showed that there was a 45% increase in the maximum strength, a 10% increase in the yield strength, and a 26% increase in the modulus over the pure epoxy-amine cured system. (c) 2006 Wiley Periodicals, Inc.