A series of poly(ethylene terephthalate) (PET) nanocomposites containing organically-modified mica (HB-Mica) were prepared by in-situ interlayer polymerization of dimethyl terephthalate and ethylene glycol. The PET nanocomposites, which contained organoclay loadings of 0 to 2 wt %, were melt-spun to produce monofilaments with various draw ratios. Some of the clay particles appeared well dispersed within the PET matrix, while others were found to form agglomerates with sizes greater than 20 nm. The addition of a small amount of organoclay was sufficient to improve the thermo-mechanical properties of the PET hybrid fibers. Both the thermal stability and the mechanical tensile properties increased with increasing clay content for draw ratios of 1-16.