Nanoclay‐encapsulated polystyrene microspheres were synthesized using reverse atom transfer radical polymerization in miniemulsion. Conversion and molecular weight were evaluated using gravimetry and gel permeation chromatography, respectively. Accordingly, conversion and molecular weight decrease by adding clay content. However, polydispersity index of the nanocomposites with higher clay content is higher. At high temperatures, thermal stability of the nanocomposites is relatively higher than the neat polystyrene, according to the thermogravimetric analysis results. Differential scanning calorimetry results show that glass transition temperature decreases by increasing clay content. Transmission electron microscopy result is in coincidence with X‐ray diffraction data and shows that clay layers are exfoliated in the matrix of PSNM 1. Scanning electron microscopy images display a homogeneous distribution of spherical particles with sizes in the range of ∼200 nm and also confirm dynamic light scattering (DLS) results. POLYM. COMPOS., 2012. © 2012 Society of Plastics Engineers