Poly(butylene terephthalate) (PBT) nanocomposites of various clay types and contents were prepared by in situ polymerization. This study examined the effect of surface urethane modification of clay (30BM) on the mechanical properties and isothermal and nonisothermal crystallization behavior of modified clay compared to pristine clay (Na) and alkyl modified clay (30B) nanocomposites. The PBT/30BM nanocomposites exhibited increased mechanical properties due to the enhanced affinity between the clay and PBT matrix. In the case of the PBT/Na nanocomposites, pristine clay can retard the crystallization rate due to steric hindrance of the narrow silicate layers. The PBT/30BM nanocomposites exhibited the fastest crystallization rates of all the samples due to wide gallery spacing and strong interactions between the 30BM and PBT molecules that lead to a nucleation effect during the crystallization process. Polarized optical microscopy showed that the spherulites in the PBT/30BM nanocomposites became smaller and increased the nuclei density at the designated crystallization temperature compared to Homo PBT.