Nanocomposite of polyurethane(PU), Nylon66(nylon), and montmorillonite(MMT) was prepared by a twin screw extruder, and the dispersion of MMT and the mechanical properties of the nanocomposite were analyzed. Dimethyl hydrogenated tallow 2-ethylhexyl ammonium modified Cloisite 25A(C25A) and methyl tallow bis-2-hydroxyethyl ammonium modified Cloisite 30B(C30B) were used as MMT. XRD and TEM analysis indicated that the continuous melt mixing by a twin screw extruder was effective in MMT dispersion. C30B having hydroxyl group on its surface has better dispersion than C25A in the PU/nylon matrix. Maximum stress and strain at break were the maximum at 1 wt% MMT regardless of matrix composition, and decreased at higher MMT content. Best MMT dispersion was also observed at 1 wt% MMT for the entire matrix composition. Aggregation of MMT occurred at MMT content higher than 1 wt%. Nylon addition also induced the aggregation of MMT because of the high polarity of nylon surface. Dispersion of MMT was very important in improving the mechanical properties of PU/nylon nanocomposite.