Clay modification was carried out by treatment of fatty nitrogen compounds (FNCs); fatty hydrazide (FH), hydroxy methyl fattyamide (HMFA), and difatty acyl thiourea (DFAT) were synthesized from vegetable oils with a sodium montmorillonite (MMT) as natural clay. This process was accomplished by stirring the clay particles in an aqueous solution of FH, HMFA, and DFAT, by which the clay layer thickness increased from 1.23 to 2.69, 2.89 and 3.21 nm, respectively. The modified clay was then used in the preparation of the polylactic acid/epoxidized palm oil (PLA/EPO) blend nanocomposites. The interaction of the modifier in the clay layer was characterized by X-ray diffraction (XRD) and Fourier transform infrared (FTIR). Elemental analysis was used to estimate the presence of FNCs in the clay. The nanocomposites were synthesized by solution casting of the modified clay and a PLA/EPO blend at the weight ratio of 80/20, which has the highest elongation at break. The nanocomposites were then characterized using XRD, transmission electron microscopy (TEM), thermogravimetric analysis (TGA), and tensile properties measurements. Improvement in mechanical properties of the FH-MMT, HMFA-MMT, and DFAT-MMT nanocomposites was obtained when 2% of the DFAT-MMT and 3% of both FH-MMT and HMFA-MMT loadings were used. PLA/EPO modified clay nanocomposites show higher thermal stability in comparison with those of the PLA/EPO blend. The XRD and TEM results confirmed the production of nanocomposites.