AbstractClay‐dispersed poly(styrene‐co‐acrylonitrile) nanocomposites (PSAN) were synthesized by a free radical polymerization process. The montmorillonite (MMT) was modified by a cationic surfactant hexadecyltrimethylammonium chloride. The structures of PSAN were determined by wide‐angle X‐ray diffraction and FTIR spectroscopy. The dispersion of silicate layers in the polymer matrix was also revealed by transmission electron microscopy (TEM). It was confirmed that the clay was intercalated and exfoliated in the PSAN matrix. The increased thermal stability of PSAN with the addition of clay was observed by thermogravimetric analysis (TGA) and differential scanning calorimetry (DSC). The dielectric properties of PSAN were measured in the frequency range 100 Hz to 1 MHz at 35–70°C. It was found that the dielectric constant from the dipole orientation had been suppressed due to the intercalation of clay. The dielectric loss is strongly related to the residual sodium content of clay, which increases as the sodium content increases by the addition of clay. Copyright © 2004 Society of Chemical Industry