Aramid-based nanocomposites were prepared by solution intercalation techniques using p-aminobenzoic acid-modified montmorillonite. Polyamide was synthesized by reacting 4,4′-oxydianiline with isophthaloyl chloride in dimethyl acetamide. To create chemical interactions between the two phases for better dispersion of organoclay, aramid chains were selectively amine end-capped. The influence of organically modified clay on the morphology was investigated by x-ray diffraction (XRD), polarized optical microscopy (POM), and transmission electron microscopy (TEM). Mechanical, thermal, and water uptake measurements were carried out to further verify other physical properties of the nanocomposites. Tensile strength, modulus, elongation at break, and toughness were improved relative to pure polymer with the addition of 6 wt% organoclay. Thermal-decomposition temperatures of the nanocomposites were in the range 300–450 °C. Water uptake of neat aramid film was rather high (5.7%) and decreased with augmenting organoclay. DSC exhibited increase in the glass transition temperature (118 °C) up to addition of 16 wt% of organoclay.