A new combination of ionically conducting polymer-clay nanocomposites based on (PAN)(8)LiClO4 + x wt % montmorillonite (unmodified) clay has been prepared using the standard solution cast process. X-Ray diffraction (XRD) analysis reveals strong interaction of polymer salt complex (PS) with the montmorillonite matrix evidenced by changes in d(001) spacing of the clay and enhancement in the clay gallery width on composite formation possibly due to intercalation of polymer-salt complex into nanometric clay galleries. Evidences of such an interaction among polymer-ion-clay components of the composite matrix has also been observed in the Fourier transform infrared (FTIR) spectrum results. FTIR results clearly indicated cation (Li+) coordination at nitrile (C N) site of the polymer backbone along with appearance of a shoulder suggesting strong evidence of polymer-ion interaction. Addition of clay into the PS matrix has been observed to affect ion-ion interaction resulting from ion dissociation effect at low clay loading in the PNC films. Complex impedance spectroscopy (CIS) analysis has provided a response comprising of a semicircular arc followed by a spike attributed respectively, to the bulk conduction and electrode polarization at the interfaces. Electrical transport appears to be predominantly ionic (t(ion) = 0.99) with significant improvement in the electrical conductivity and thermal stability properties, (C) 2008 Wiley Periodicals, Inc. J Polym Sci Part B: Polym Phys 46: 2577-2592, 2008