This article presents a review of studies on materials, preparation, properties, and characterization of polyvinyl alcohol (PVA) nanocomposite hydrogels. The structure and properties of Montmorillonite, the nanoclay used in the manufacture of PVA nanocomposites and techniques for making PVA nanocomposite hydrogels have been reviewed. The characterization techniques such as Fourier transform infrared spectroscopy (FT‐IR), Differential scanning calorimetry (DSC), Dynamic mechanical analysis (DMA), Scanning electron microscopy, Transmission electron microscopy (TEM), X‐ray diffraction (XRD) are also studied. The XRD patterns and TEM images have proven the intercalated and exfoliated structures of PVA nanocomposite hydrogels that is due to the presence of nanoclay layers. Investigation of FT‐IR spectra shows the bonding formation between OH and silanol groups of PVA and Montmorillonite. Also, the results of DSC and DMA indicated a decrease in crystallinity and the glass transition temperature of PVA by the incorporation of nanoclay, while the loss modulus is increased compared to that of pure PVA. POLYM. COMPOS., 38:1086–1102, 2017. © 2015 Society of Plastics Engineers