In this study, electrospun fibers of melt blended poly(lactic acid) and poly(ethylene glycol), (PLA)-PEG blends involving 10, 15 and 20wt% PEG and their corresponding composites with organically modified montmorillonite, Cloisite 30B were prepared and characterized by x-ray diffraction, differential scanning calorimetry, thermogravimetry and direct pyrolysis mass spectrometry techniques. The narrower fiber diameters observed for the PLA-PEG fibers involving organoclay compared to the corresponding neat fibers were associated with the presence of quaternary ammonium salt as organic modifier increasing electrical conductivity. Strong evidence for phase separation during the electrospinning process was detected for PLA-PEG fibers. On the other hand, for PLA-PEG composite fibers, as a consequence of the diffusion of both PLA and PEG chains from the bulk polymer into the galleries between the silicate layers of the organoclay, the interactions between PLA and PEG chains were enhanced and both components showed similar thermal characteristics, indicating lack of phase separation. These interactions further inhibited the interactions between the PLA chains and organic modifier of the organoclay