Biodegradable polyurethane (PU)/clay nanocomposite films were prepared via extrusion compounding process followed by casting film process. Organically modified montmorillonite (denoted as C30B) with a large amount of hydroxyl groups on its surface was used for the formation of strong bonding with PU resin. From both XRD analysis and TEM observations, the intercalated and exfoliated structure, and dispersion state of silicate platelets in the compounded nanocomposite films were confirmed. In addition, the rheological and tensile properties, optical transparency, oxygen permeability of the prepared nanocomposites were investigated as a function of added nanoclay content, and moreover based on these results, the corelation between the morphology and the resulting properties of the nanocomposites could be presented. The inclusion of nanoclays at appropriate content resulted in remarkable improvement in the nanocomposite performance including tensile modulus, elongation, transparency, and oxygen barrier property, however at excess amount of nanoclays, reduction or very slight increase was observed due to poor dispersion. The biodegradability of the prepared nanocomposite film was evaluated by examining the deterioration in the barrier and tensile properties during degradation period under compost.