Nanocomposites of rigid polyurethane foam with unmodified vermiculite clay are synthesized. The clay is dispersed either in polyol or isocyanate before blending. The viscosity of the polyol is found to increase slightly on the addition of clay up to 5 pphp (parts per hundred parts of polyol by weight). The gel time and rise time are significantly reduced by the addition of clay, indicating that the clay acts as a heterogeneous catalyst for the foaming and polymerization reactions. X-ray diffraction and transmission electron microscopy of the polyurethane composite foams indicate that the clay is partially exfoliated in the polymer matrix. The clay is found to induce gas bubble nucleation resulting in smaller cells with a narrower size distribution in the cured foam. The closed cell content of the clay nanocomposite foams increases slightly with clay concentration. The mechanical properties are found to be the best at 2.3 wt% of clay when the clay is dispersed in the isocyanate; the compressive strength and modulus normalized to a density of 40 kg/m(3) are 40% and 34% higher than the foam without clay, respectively. The thermal conductivity is found to be 10% lower than the foam without clay.