Ethylene and 10-undecen-1-ol have been successfully copolymerized by an organically modified montmorillonite (OMMT)-intercalated metallocene catalyst, Et[Ind](2)ZrCl2, activated by methylaluminoxane (MAO). The obtained hydroxy-functionalized polyethylene (PE-OH)/ OMMT nanocomposites exhibit enhanced structural stability as compared with the neat PE-based ones, with no significant collapse of the nanocomposite structure being detected by WAXD examination after high-temperature processing. The simultaneous polyolefin functionalization provides an effective and convenient solution to stabilize the PE/MMT nanocomposite structure formed by in-situ polymerization.