An organically modified clay (o-clay) and a pristine clay (p-clay) were used to prepare biodegradable thermoplastic starch (TPS)/clay nanocomposites by melt processing. The gelatinization behaviour of starch with glycerol/H2O was investigated and the gelatinized temperature (Tgel) was determined using a polarized optical microscopy (POM) equipped with a hot stage. The morphologies of gelatinized starch and extruded starch were revealed by scanning electron microscopy (SEM). Thermal stabilities of starch/clay nanocomposites were evaluated under N2 atmosphere using thermogravimetric analysis (TGA). Transparent films of starch/clay hybrids were fabricated by hot pressing. Intercalation of starch into clay galleries and crystalline structure of starch were investigated using X-ray diffraction (XRD). It was found that the increase in d-spacing of organically modified clay was due to starch molecular intercalation while the increase in d-spacing of pristine clay was mostly caused by glycerol intercalation because of the narrow valid d-spacing of pristine clay and special ring-like monomer of starch. The mechanism of starch intercalation in clay galleries was discussed.