The morphology and rheological and mechanical properties of nanoclay-reinforced polypropylene nanocomposites were investigated with aid of transmission electron microscopy (TEM), thermo gravimetric analysis, rheometry, and mechanical tests. The organically modified silicate (montmorillonite) was used as a reinforcing material and maleic anhydride-grafted polypropylene oligomer as a cornpatibilizer to improve the clay dispersion and adhesion. The object of the study was to examine the effect of screw speed of the co-rotating twin-screw extruder on the clay exfoliation and nanocomposite properties. Also, the effect of compatibilizing agent was taken into account. The main result of the study was that nanocomposites showed both intercalated and exfoliated structures depending on the screw speeds of extruder. TEM images revealed that the dispersion of silicate layers was greatly influenced by the screw speed. However, even when the silicate layers were highly exfoliated, there was no remarkable effect on mechanical properties of the nanocomposite.