The effect of nanoclay on the morphology of polypropylene - cycloolefin copolymer (PP/COC - 80/20 wt.%) blends was studied by using a combination of rheological measurements, X-ray diffraction (XRD), scanning electron microscopy (SEM) and thermal analysis. The blend and hybrid nanocomposite samples were prepared by a twin screw extruder. It was found that although the viscosity ratio of COC/PP was unfavorable for COC droplet deformation, the COC phase was converted to fibrils finely dispersed in PP matrix. This could be explained in term of the high elasticity of the COC droplets that suppressed the droplet breakup in the favor of fibrillation process. The high glass transition temperature of COC (140 ℃) could also assist restoring the generated microfibril morphology upon cooling. The experimental results also depicted that the droplet deformation and microfibril formation of PP/COC/Nanoclay nanocomposites mainly depend on the prepared partitioning of nanoparticles, which could be controlled predominantly by kinetic parameters. While the localization of nanoclay in the PP matrix resulted in smaller COC droplets and therefore fibrils with smaller diameter, the presence of nanoclay inside COC droplets reduced the droplet deformability, which could lead to fibrils with larger diameter. These results were found to be in good agreement with theoretical predictions.