This paper presents work on organically-modified montmorillonite (MMT) nanoclay embedded in rigid palm oil-based polyurethane (PU) foam. MMT was modified with organic surfactant diamino propane (DAP). PU foam was fabricated in closed mold, and the amount of DAP-MMT was varied in each foam formulation. The obtained foam was tested for its microstructure and morphology. Appearance of peaks from infra-red spectra corresponding to N-H, C=O, and C-N confirms the formation of PU networks. Scanning electron microscopy (SEM) revealed fine, closed-cellular structure at low clay loading; increasing DAP-MMT content induced larger cell sizes with blowholes. X-ray diffraction (XRD) indicates fully-exfoliated clays at 1 wt. % and partial-exfoliation at 3 wt. % clay loading, suggesting clumping of clays as DAP-MMT content increased.