In this paper the diffusion of water through the nanoclay filled TPU/PP blends was investigated at various temperatures. The effect of blend ratio, compatibilisation and nanoclay addition on the transport properties was studied in detail. Special attention has been given to study the mechanism of diffusion. Thermodynamics and Arrhenius parameters were evaluated from the diffusion data. The various parameters such as diffusion coefficient (D), permeation coefficient (P), sorption coefficients (S) were evaluated at different diffusion conditions. Attempts were made to correlate the observed morphology of the blends with transport properties. Addition of PP into TPU decreases water sorption of the system due to the decrease in overall polarity of the system and further reduced by addition of compatibiliser and nanoclay into the system. Compared to the ether-TPU based blend nanocomposites, the ester-TPU blends show better compatibility as confirmed by analysis.