Abstract-Interest in polymer nanocomposites bloomed over the last decades due to its unusual property improvements. A novel nanocomposite consisting of Na + montmorillonite nanoclay and polyurethane nanocomposite was successfully prepared using solution intercalation method. Nanoclay was modified using transition metal ions which were copper (II) chloride and iron (III) chloride to achieve good dispersion and to reduce clay agglomerations. The modification process proved to be successful through SEM micrographs. Gas permeability test was carried out in a Membrane Separation Testing Unit. Significant improvements in barrier properties were observed with the addition of modified montmorillonite. A remarkable four fold decrease was seen in polyurethane incorporated with 1% modified iron followed by a nearly threefold decrease in polyurethane incorporated with 1% modified copper when tested with oxygen gas. Polyurethane incorporated with 1% modified iron and copper also showed dramatic decreases of 60% and 50% respectively when tested with nitrogen gas.