Melt compounding was employed to prepare polypropylene (PP)/ethylene-octene copolymer (POE)/organic-montmorillonite (OMMT) nanocomposites. Polypropylene grafted with maleic anhydride (MPP) was added as a compatibilising agent. Analyses by wide-angle X-ray diffraction, transmission electron microscopy and scanning electron microscopy indicated that polymer chains intercalated into OMMT and that some of the OMMT delaminated into nano-layers dispersed in the PP matrix. Mechanical tests showed that the addition of POE increases the toughness of PP, but it decreases the stiffness. When OMMT and MPP were added, the toughness of PP increased greatly and the stiffness was not changed profoundly. Differential scanning calorimetry was used to study the melt and crystallization behavior of the composites. The results indicate that OMMT and MPP act as effective nucleating agents.