In this study, organoclay-containing polystyrene (PS)-based nanocomposites were fabricated by extrusion in the presence of thermoplastic elastomer modifiers. Styrene-butadiene-styrene (SBS) rubber was used as the elastomeric compatibilizer and maleic anhydride (MA) was grafted onto SBS rubber at different ratios. Grafting was made via melt blending. Cloisite (R) 30B was used as the organoclay and it was added to PS and PS/SBS blends using a corotating twin-screw extruder, followed by injection molding. Clay loading was kept constant as 2 wt%, and the elastomer content was varied between 0 and 40 wt% throughout the study. MA grafted SBS enhanced the intercalation/exfoliation of clay layers resulting in higher tensile strength, modulus, elongation at break, and impact strength with respect to neat PS. Composites containing 15 wt% MA grafted SBS displayed the optimum average domain size resulting in the high impact strength without deteriorating the tensile strength and modulus values. Elastomer addition increased the glass transition temperature of the samples due to branching or cross-linking during extrusion. PS and PS/SBS exhibited similar melt flow index values with their organoclay-containing composites. MA acted as a plasticizer and decreased viscosity. Scanning electron microscopy study indicated that dispersion of clay layers was observed at the PS-SBS interphase and also in the elastomer phase. Intercalated and exfoliated structures of organoclay layers were confirmed by X-ray diffraction and transmission electron microscopy analyses.