This paper described a novel and bottom-up in situ polymerization method to prepare the poly(vinyl alcohol) (PVA)/graphene oxide (GO) nanocomposites. The approach is conducted by mixing the vinyl acetate, methanol, initiator and GO at the aid of high power ultrasonic, followed by free radical polymerization and alcoholysis reaction, resulting in the in situ formation of PVA matrix and molecular level dispersion of GO. X-ray diffraction (XRD), Transmission electron microscopy (TEM) and scanning electron microscope (SEM) revealed that GO nanosheets were completely exfoliated, uniformly dispersed and highly oriented along the surface of nanocomposite films. Fourier-transform infrared spectroscopy (FTIR) and differential scanning calorimetry (DSC) evidenced the existence of strong hydrogen bond interactions between the GO nanosheets and PVA matrix. Furthermore, the mechanical properties and water vapor barrier properties of PVA/GO nanocomposites had been strikingly enhanced by adding a small content of GO (with GO loading as low as 0.01-0.08 wt%). Compared with the neat polymer, the tensile strength increased markedly from 42.3 to 50.8 MPa and Young’s modulus increases from 1477 to 2123 MPa at the GO incorporation of only 0.04 wt%. Moreover, it gave rise to about 78% decline in the coefficient of moisture permeability.