Poly (butyleneterephthalate) (PBT)/montmorillonite (MMT) hybrid nanocomposite was prepared via melt intercalation using a co-rotating twin screw extruder. From the analysis using X-ray diffraction (XRD) and transmission electron microscope (TEM), it was confirmed that the PBT/MMT hybrid forms an intercalated structure in which MMT particles are partially exfoliated and are dispersed uniformly in the PBT matrix. The effect of clay layers on the non-isothermal crystallization behaviors of PBT was investigated by differential scanning calorimetry (DSC), and modified Avrami analysis was used for the interpretation of the results. It was found that the introduction of nano-size clay layers accelerates the non-isothermal crystallization process of PBT and the clay layers act as nucleating agents. Dynamic mechanical analysis for the nanocomposite showed that storage modulus of the PBT matrix was increased by more than 40% over whole temperature range on the addition of MMT by 5 wt%, but the change in glass transition temperature was marginal.