Trifunctional organosilane-modified clay was synthesized and used to prepare waterborne trifunctionalsilane-terminated polyurethane (WSPU)/clay nanocomposite dispersions in this study. Qualitative evidence of the presence of chemically attached silane molecules on clay were confirmed by Fourier transform infrared spectroscopy. The grafted amount and the grafting yield were determined by thermogravimetric analysis and the obtained results were in good agreement with the cation exchange capacity of pristine clay. X-ray diffraction and transmission electron microscopy examinations indicated that the clay platelets are mostly intercalated or partially exfoliated in the SPU matrix with a d-spacing of similar to 2.50 nm. Clay does not influence the location and peak broadness of the glass transition temperature of soft segment as well as hard segment domains in the WSPU/clay films. WSPU/clay dispersion with higher clay content exhibits a marginal increase in the average particle size, but silane modified clay has a pronounced effect compared with Cloisite 20A-based nanocomposites. In addition, the incorporation of organophilic clay can also enhance the thermal resistance and tensile properties of WSPUs dramatically through the reinforcing effect. The improvement in water and xylene resistance of the silane modified clay nanocomposites proved that trifunctional organosilane can be used as effective modifiers for clays. Storage stability results confirmed that the prepared nanocomposite dispersions were stable. This method provides an efficient way to incorporate silane modified clay in SPU matrix. (c) 2007 Wiley Periodicals, Inc.