Polyurethane (PU) resin systems are generally characterized as aromatic and aliphatic. Aliphatic PU has lower mechanical properties than the aromatic resin system due to its chemical structure. The objective of the present work is to improve the mechanical properties of aliphatic resin system by exfoliating silicate nano particles. A pultrudable, soy-based, polyol-isocyanate aliphatic resin has been used as the base system. Nanocomposites were synthesized using the base resin and modified montmorillonite (MMT) clay. Modification of Na-MMT was confirmed by Fourier transform infrared spectroscopy (FTIR) and X-ray photoelectron spectroscopy analyses. Increase in the basal spacing of the nanoclay was observed by wide angle X-ray diffraction. The curing mechanism of soy-based PU resin with 1wt% of triethanol amine/methyl iodide exchanged MMT clay was studied using differential scanning calorimetry as well as FTIR. Tensile testing of the nanocomposites showed improved modulus when compared to the neat aliphatic resin system. Soy-based nanocomposites hold great promise as environmentally friendly and low cost materials for structural and automotive applications.