The effect of a chitosan-modified nanoclay (CMNC) on the physical, mechanical, and antimicrobial properties of poly(vinyl alcohol) (PVA) hydrogels prepared by the electron beam irradiation method is reported in comparison with pristine nanoclay (PNC). The X-ray diffraction (XRD) results confirm that the chitosan modification process of nanoclay led to an enhancement in the clay gallery spacing. The inclusion of nanoclays in the PVA matrix decreased the gel content while it increased the swelling degree of the hydrogels. Both PNC and CMNC played a role, depending on their amounts, in swelling of the hydrogel. The swelling kinetic studies revealed a diffusion-controlled swelling process. The diffusion coefficient of water molecules in hydrogels was decreased in the presence of PNC, while it increased with CMNC. Rheological investigations verified the influential role of nanoclays in decreasing the chemical crosslink density of the hydrogel. CMNC exhibited a higher reinforcing effect on hydrogel mechanical properties than PNC did, although the rheological analysis, in agreement with the XRD results, indicated a better dispersion of PNC in the PVA matrix. According to the antimicrobial tests, perfect inhibition of bacteria growth was obtained only for the hydrogels with CMNC.