In this study, the effect of surface properties of three organophilic montmorillonites, i.e., the structure and concentration of organic amine surfactant modifier on the degree of dispersion in water expandable polystyrene (WEPS)-organoclay nanocomposites, was investigated. The WEPS nanocomposites were synthesized via a conventional suspension polymerization in which water droplets were finely dispersed in the polystyrene-clay matrix with the aid of a hydrophilic polymer. The combined transmission electron microscopy and wide angle X-ray scattering results showed a poor dispersion of the organoclay with high organic modifier content and thickness of surfactant layer (highest gallery distance) in WEPS matrix. Based on a simple phenomenological explanation, this was attributed to the escaping of polymer chains from organoclay galleries, i.e. inverse intercalation during suspension polymerization, after reaching a critical average length. The immiscibility between polymer and long surfactant chains is the major mechanism of inverse intercalation. On the other hand, different morphologies e.g. intercalated and exfoliated was observed in amples containing organoclays with smaller gallery distances. Therefore, the extent of exfoliation of an organoclay in WEPS matrix does not relate to the basal spacing of the organoclay. Comparing the observed results with the existing models' predictions of phase behavior of polymer melt/organoclay nanocomposites suggested the need to development a new model for the prediction of polymerization inducing phase separation in organically modified layered silicates-monomer-polymer blends.