A new type of layered zirconium phosphonate (zirconium glycine‐N, N‐dimethylphosphonate, abbreviated as ZGDMP), with functional group of ‐COOH, has been successfully prepared and characterized by Fourier transform infrared (FTIR) spectroscopy, X‐ray diffraction (XRD), scanning electron microscopy (SEM) and transmission electron microscopy (TEM). To confirm the effect of the functional group ‐COOH on the structure and properties of composites, a series of chitosan/zirconium phosphonate modified by n‐butylamine (BA‐ZGDMP) nanocomposite films were prepared by casting process. FTIR spectra suggested that strong interactions existed between BA‐ZGDMP and chitosan matrix. Compared to neat CS film, tensile strength (σb) and elongation at break (εb) of the nanocomposite film improved by 35.1% and 15.6%, respectively, with loading ratio of just 1.0 wt %. In addition, the BA‐ZGDMP also improved the water resistance of the nanocomposites. © 2010 Wiley Periodicals, Inc. J Appl Polym Sci, 2011