Addition of nanoclays into a polymer matrix leads to nanocomposites with enhanced properties to be used in plastics for food packaging applications. Because of the plastics' high stored energy value, such nanocomposites make good candidates for disposal via municipal solid waste plants. However, upon disposal, increased concerns related to nanocomposites' byproducts potential toxicity arise, especially considering that such byproducts could escape disposal filters to cause inhalation hazards. Herein, we investigated the effects that byproducts of a polymer polylactic acid-based nanocomposite containing a functionalized montmorillonite nanoclay (Cloisite 30B) could pose to human lung epithelial cells, used as a model for inhalation exposure. Analysis showed that the byproducts induced toxic responses, including reductions in cellular viability, changes in cellular morphology, and cytoskeletal alterations, however only at high doses of exposure. The degree of dispersion of nanoclays in the polymer matrix appeared to influence the material characteristics, degradation, and ultimately toxicity. With toxicity of the byproduct occurring at high doses, safety protocols should be considered, along with deleterious effects investigations to thus help aid in safer, yet still effective products and disposal strategies.