The approach of processing reactive functional nanofillers into thermoplastic copolyester (TPE-E) using reactive extrusion (REX) has been explored. The mixing of a hydroxyl-bearing organo-fluoromica combined in toluene with a tetraglycidyl-4,4diamino-diphenylmethane (TGDDM) led to the intercalation of the TGDDM molecule into the interlayer space. Subsequent REX work involved processing TPE-E with 0.3% (w/w) TGDDM and 2% (w/w) organoclay in a twin-screw extruder. It is demonstrated that the effects of the modification route to control morphology on the nanoscale could be systematically investigated. The hard segment acted as a physical crosslink, imparting elastomeric properties on the soft segment. Increases seen in creep resistance and reduction in the water vapor transmission rate of TPE-E proved that the reactive organo-fluoromica was able to promote enhanced dimensional stability and barrier properties of TPE-E.