Abstract. Samples were produced by injecting Na + -montmorillonite (Na + -MMT) slurry into a co-rotating twin-screw extruder. Na + -MMT was modified inside the extruder, in an in-situ process, and blended with the LDPE/LLDPE in melt state. Three different types of alkyl ammonium salt (ALAMS) were used as modifier to study the effect of chemical composition and chain length of ALAMS on the dispersion of nanoparticles. Also, the effect of nanoclay content on structural, mechanical, and permeability properties of the samples was investigated. To translate the data into intelligible trends, response surface method was utilized to analyze the effects of the factors on the results. Moreover, transmission electron microscopy was implemented to observe the dispersion of nanoclay platelets. The results suggested that the chain length of ALAMS dramatically affects its ability to modify nanoclay platelets. What is more, while nanoclay increase deteriorates nanoparticles dispersion, it brings about better mechanical and gas barrier properties. The improvement in the properties was higher than those of nanocomposites prepared by conventional method. By studying the effects of feeding rate on nanoclay dispersion, we proved that unlike conventional melt intercalation, water-assisted melt intercalation is controlled by diffusion rather than shear stress. In the end, we proposed a mechanism for this process.