PMMA/reactive halloysite nanocomposites were firstly prepared using reactive halloysite with double bonds. The halloysite was functionalized to improve its dispersion in the polymer matrix. The reactive halloysite could increase the molecular weight of PMMA. The molecular distribution of PMMA/reactive halloysite nanocomposite was more uniform than that of PMMA. The moisture absorption of PMMA/reactive halloysite nanocomposite increased with the addition of the reactive halloysite. Thermogravimetric analysis (TGA) and differential scanning calorimetry (DSC) confirmed that the thermal stability of PMMA/reactive halloysite nanocomposites was greatly enhanced. Significant improvement in the mechanical property of PMMA nanocomposites was achieved by the addition of 3 wt % reactive halloysite. A 31.1% increase in tensile strength and a 64.2% increase in Young’ modulus of the nanocomposites with 3 wt % of the reactive halloysite were achieved. Finally, the formation mechanism of PMMA/reactive halloysites nanocomposites was proposed. This approach demonstrated the potential for general applicability to other polymer nanocomposites.