Polylactic acid nanocomposite was prepared by melt blending polylactic acid (PLA) and transition metal ion (TMI)-modified montmorillonite (MMT; TMI-MMT) using a co-rotating conical twin-screw microcompounder attached with a mini injection moulder. MMT was modified by ion exchange reaction using TMI. Intercalation morphology of TMI on MMT was investigated by x-ray diffraction (XRD) and transmission electron microscopic analyses. XRD patterns indicated penetration of the metal ions into the MMT interlayer and formation of intercalated structure. In order to increase the adsorbed amount of Zn²⁺ and Cu²⁺ ions, MMT was previously intercalated with ethylene diamine. Thermogravimetric analysis indicated an increase in the onset of degradation temperature of nanocomposites when compared with virgin PLA. The isothermal cold crystallization kinetics of PLA/TMI-MMT nanocomposites was investigated by differential scanning calorimetry in the temperature range of 100–120°C and the development of relative crystallinity with the crystallization time was analyzed by the Avrami equation. PLA nanocomposites reinforced with TMI-MMT showed a significant increase in tensile and flexural modulus and impact strength when compared with virgin PLA. The flammability studies of PLA/TMI-MMT nanocomposites displayed slow rate of burning and enhanced carbonaceous char formation when compared with virgin PLA matrix.