In situ polymerization of poly(ethylene terephthalate) (PET) organo-montmorillonite clay nanocomposites was investigated in terms of the natures of organic clay modifiers and their affinities with PET, esterification versus polycondensation mode of clay addition, time and temperature of polymerization, ethylene glycol/terephthalic acid (E/T) ratio, and other process modifications such as foam and diethylene glycol suppression, reactor pressure, and variations in catalyst, antioxidant, and metal stabilizer. The nanocomposites were found to degrade during polymerization. This degradation increased diethylene glycol concentrations and reduced melting temperatures. It also increased carboxyl and decreased hydroxyl end group concentrations from normal PET values, which caused reduced rates of nanocomposite solid-state polymerization. Cloisite 30B had the best affinity with PET as a result of the hydroxyl groups present in both PET and the organic clay modifier. Polycondensation of Cloisite 30B nanocomposites at 270 • C from bis(2-hydroxyethyl)terephthalate, with an E/T ratio of 1.2:1, yielded the most fully exfoliated nanostructures as verified by X-ray diffraction and transmission electron microscopy evaluations. C