Poly(ethylene terephthalate) (PET)/clay nanocomposites (PCNs) with N-methyl diethanol amine (MDEA)based organoclays are synthesized by using in situ polymerization. Four kinds of MDEA-based materials are prepared and used as organifiers of pristine montmorillonite. The clay treated with the organifiers has a d-spacing range that is about 14-21 angstrom. The PCNs with these organoclays are characterized by using wide-angle X-ray diffraction, scanning and transmission electron microscopy, atomic force microscopy, capillary rheometry, and tensile and barrier testing. The PCNs form an intercalated and delaminated structure. The well-stacked nanoclays are broken down into small pieces in the PET matrix and the thickness of the clay bundle decreases to 20 nm. The melt viscosity and tensile strength of these PCNs increases with only 0.5 wt % clay. In oxygen barrier testing, the PCN with I wt % well-dispersed organoclay shows a twofold higher barrier property than pure PET. (c) 2006 Wiley Periodicals, Inc.