In the quest for improved mechanical and barrier performance for biopolymers used for food packaging while maintaining biodegradability and therefore environmental-friendliness, one approach is the use of natural nanoclays to produce nanocomposites. In this study biodegradable starch-nanoclay composites were synthesized by melt extrusion processing. One natural montrorillonite (MMT) and one organically modified MMT (Nanomer I30E) were used and the dispersion of the silicate layers in the hybrids was characterized by X-ray diffraction (XRD) and Transmission electron microscopy (TEM). It was observed that starch/MMT nanocomposites showed higher tensile strength and better barrier properties to water vapor than the starch/I30E hybrids as well as starch blank, due to the formation of intercalated nanostructure. Future work will be mostly focused on clarifying the miscibility issues of starch and clay, and studying the structure of the nanocomposites. The properties of composites will be further improved by modification of starch structure, surface charge of the clays, and the interactions between the starch, clay and plasticizers.