A polystyrene‐modified epoxidized novolac resin/montmorillonite nanocomposite was fabricated and characterized successfully. For this purpose, novolac resin (NR) was epoxidized through the reaction of phenolic hydroxyl group with epichlorohydrin in super basic medium to produce epoxidized novolac resin (ENR). Afterward, a polystyrene was synthesized by atom transfer radical polymerization (ATRP) technique, and then brominated at the benzylic positions using N‐bromosuccinimide (NBS). The brominated polystyrene (PSt‐Br) was reacted with ethanolamine in basic medium in order to afford an amine‐functionalized polystyrene (PSt‐NH2). An organo‐modified montmorillonite (O‐MMT) was synthesized through the treatment of MMT with hexadecyl trimethyl ammonium chloride salt. Finally, ENR‐PSt/MMT nanocomposite was fabricated through curing a mixture of ENR (70 wt.%) and O‐MMT (5 wt.%) with PSt‐NH2 (25 wt.%). Transition electron microscopy (TEM) and powder X‐ray diffraction (XRD) analysis revealed that the fabricated nanocomposite has an exfoliated structure. Thermal property studies using thermogravimetric analysis (TGA) showed that the curing of ENR by PSt‐NH2, as well as incorporation of a small amount of MMT have synergistic effect on the thermal stability of the ENR resin.