High-performance epoxy-clay nanocomposites and hybrid epoxy nanocomposites modified with both organoclay and rubber were synthesized. The nanocomposites were characterized by optical microscopy, XRD, AFM, TEM and SEM. A new method to disperse organoclays into organic media, high pressure mixing (HPM), is proposed. TEM images show that organoclay agglomerates are broken down by the HPM method to form small particles consisting of 5{598}10 silicate layers. Adding organoclay into rubber-modified epoxies not only increases the degree of cure and T g , but also changes the morphology of the rubber phase.  Water uptake behavior of nanocomposites has been systematically studied with Fickian and non-Fickian diffusion models. Diffusion models for nanocomposites were developed. The diffusivity in nanocomposites decreases with increasing clay loading and improving dispersion quality of organoclay. Hybrid nanocomposites can decrease the effect of rubber on water uptake of epoxy resins at high environmental temperature.  The fracture toughness of epoxy systems is greatly enhanced by adding organoclay and by improving dispersion quality of organoclay in epoxy resins. The increased toughness is explained in terms of a crack-pinning mechanism and increased fracture surface area. There is a superposition effect on toughness of hybrid epoxy nanocomposites modified with both rubber and organoclay