Thermomechanical properties and. crystallization behavior of polyethylene terephthalate) (PET) nanocomposites containing layered double hydroxide (LDH) were investigated. To enhance the compatibility between PET matrix and LDH, dimethyl 5-sulfoisophthalate (DMSI) anion intercalated LDH (LDH-DMSI) was synthesized by coprecipitation method, and its structure was confirmed by Fourier transform infrared (FTIR) spectrometer and X-ray diffraction (XRD) measurements. Then, PET nanocomposites with LDH-DMSI content of 0, 0.5, 1.0, and 2.0 wt% were prepared by in-situ polymerization. The dispersion morphologies were observed by transmission electron microscopy (TEM) and XRD, showing that LDH-DMSI was exfoliated in PET matrix. Thermal and mechanical properties, such as thermal stability, tensile modulus, and tensile yield strength of nanocomposites, were enhanced by exfoliated LDH-DMSI nanolayers. However, elongation at break was drastically decreased with LDH loading owing to the increased stiffness and microvoids. The effect of exfoliated nanolayers, which acted as a nucleating agent confirmed by differential scanning calorimeter (DSC), on the microstructural parameters during isothermal crystallization, was analyzed by synchrotron small-angle X-ray scattering (SAXS). It is believed that nanocomposites could be crystallized more easily owing to the increased nucleation sites, which lead to the decrease of average amorphous region size and the long period with the increase of LDH-DMSI content. (c) 2006 Wiley Periodicals, Inc.