In the present study we investigated a clay nanocomposite based on polybenzoxazole (PBO) in order to get high performance PBO nanocomposite fibers. We synthesized polyhydroxyamide (PHA), a precursor polymer to PBO, by low temperature polymerization of dihydroxybenzidine and isophthaloyl chloride. Three kinds of clay dispersions were prepared by in-situ polymerization method, direct mixing of PHA and organo-clay, and mixing with sonication, respectively. X-ray diffraction experiment revealed that PHA-clay nanocomposite showed exfoliation in both direct mixing method and mixing with sonication method. On the other hand, a PHA-clay composite prepared by in-situ method showed no intercalation and exfoliation. TGA and DSC study revealed that the PHA-clay nanocomposites could cyclize at lower temperature compared with PHA. This implies that clay nanoparticles affect the thermal cyclization reaction of PHA lowering the cyclization temperature.