Hybrid filler reinforced thermoplastics composed with short glass fiber (GF) and different particulate fillers, such as calcium carbonate, talc and glass spheres, present special interest for engineering applications, as substantial reductions in mechanical properties anisotropy and molding warpage are expected from these systems, as compared to the same characteristics inherent to binary composites with GF only. These improvements are achieved by the partial substitution of GF by particulate fillers and are attained at the cost of minor reductions in rigidity, strength and toughness properties of these ternary composites. However, when nanoscale fillers such as nanoclay (NC) are incorporated in GF-reinforced thermoplastics, the mechanical strength properties of these systems are severely affected, even at very low NC content. Literature data concerning the phenomena that cause the deterioration of the tensile, flexural and impact properties of thermoplastics with hybridized reinforcement of short GF with NC are scarce and require to be sufficiently understood so as to overcome this limitation. Thus in this work, using model GF-reinforced polypropylene (PP) composites with varying total and relative concentrations of GF and organophilic montmorillonite clay (O-MMT) along with maleated PP as compatibilizer were twin-screw extrusion compounded with three different mixing protocols, in order to identify the factors leading to the observed loss in mechanical strength properties. Using tensile, flexural, izod impact and dynamic-mechanical (DMTA) characterization tests and electron microscopy (SEM and TEM) elucidation of the fiber-matrix interface/interphase microstructure, it is concluded that the physical presence of NC particles at the interface contributes towards substantial reduction of shear stress transfer at the fiber-polymer interface.