Poly(methyl methacrylate)/Montmorillonite clay nanocomposites were synthesized via the free radical polymerization of methyl methacrylate in the presence of alkyl ammonium substituted polysilsesquioxane surfactant-modified clay and AIBN initiator in ethanol and aqueous ethanol solvent. MMT clay was initially cation exchanged with the surfactant to enhance its hydrophobicity and to expand the interlamellar spaces of silicate platelets. The 3-D structured surfactant and water molecules reduce the surface energy of the clay dramatically, which promotes miscibility of polymer/ clay nanocomposites. The intercalation and dispersion of clay were quantified by both X-ray diffraction and transmission electron microscopy, and the morphologies of the nanocomposites were observed by scanning electron microscopy. Both the alkyl ammonium polysilsesquioxane surfactant and filler clay enhanced thermal and mechanical properties of the nanocomposites as investigated with thermo gravimetric analysis and differential scanning calorimetry.