Novel Thermoplastic Polyurethane (TPU)-dual modified Laponite clay nanocomposites were prepared by ex-situ and in-situ techniques. Two types of modified clays used in this work differ from each other by the number of active functional groups (tethering). Modified nanoclays are characterized by FTIR, Solid State NMR, XRD and TGA. Structural differences in the modified clays lead to novel tubular, elliptical and spherically aggregated morphologies of clays together with the hard segments of TPU. Changes in such morphology result in the difference in segmental relaxation, mechanical and rheological properties of the nanocomposites. In-situ prepared nanocomposites register inferior properties as compared to their ex-situ counterparts. The percent improvement in tensile strength and elongation at break of the ex-situ prepared nanocomposites with the modified clay having lesser tethering are found to be 67% and 208%, respectively. Thermal stability is enhanced by 35 degrees C as compared to that of the neat TPU. (C) 2010 Published by Elsevier Ltd.