This study describes the mechanism of flammability reduction in flame-retarded polymer matrix organo-montmorillonite reinforced nanocomposites. Morphologies of untested polymer nanocomposites and char residues formed by combustion in the mass loss calorimeter are characterized by XRD and TEM techniques. It is postulated that a combination of well-dispersed montmorillonite platelets and flame retardants in the polymer matrix provides nano-structured char formation. Initial montmorillonite dispersion in flame-retarded nanocomposites is found to be a major controlling factor on formed char nanostructures. An initially intercalated structure is invariantly converted to complete montmorillonite collapse whereas an initially exfoliated structure transforms to nano-structured chars demonstrating retained exfoliation or a new state of intercalation via incomplete collapse of montmorillonite layers. It is proposed that nano-structured char formation is the effective mechanism of flammability reduction, i.e. reduction in rate of heat release during combustion, in flame-retarded polymer nanocomposites. (C) 2011 Elsevier Ltd. All rights reserved.