In this work synthesis & characterization of composite materials based on montmo rillonite (MMT) clay and intrinsically conducting polyaniline (PANI) is studied. The MMT type of clay used is locally available in the region which was used after chemical act ivation. The main thrust of this work was to know the possibility of usage of locally availab le clay to synthesise novel nanocomposites. Synthesises of PANI and processing and treatment of this clay was carried out in the lab by the authors. PANI was successfully incorporated into MMT to form PANI-MMT nanocomposites. The resulting organic-inorganic hybrid material, PA NI-MMT has been characterized by various physicochemical techniques. Formation of PANI inside the clay tactoid has been confirmed by X -ray d iffraction studies. Infrared spectroscopy studies reveal the presence of physicochemical interaction, probably hydrogen bonding, between clay and polyaniline. One of the main tec hnological applications of conducting polymers, particularly PANI, is in the area of corrosion protection of active metals. PANI-MMT nanocomposites synthesized using the present method is generally used to protect steel surface against corr osion.