Abstract: An epoxy/clay nanocomposite suitable for use as matrix material for printed circuit boards is disclosed. The nanocomposite of the present invention comprises a layered clay material uniformly dispersed in an epoxy polymer matrix, wherein the clay material has been modified to an organoclay by ion exchange with (1) benzalkonium chloride and (2) dicyandiamide or tetraethylenepentamine. The epoxy/clay nanocomposites of the present invention have superior dimensional and thermal stability, and a lower hygroscopic property. The invention also includes the prepregs or circuit boards containing the epoxy/clay nanocomposite.