Naturally available waste biomass rice husk (RH) was modified and used to prepare nanocomposites with polyvinyl chloride (PVC) and montmorillonite clay (MMT) in a green pathway of melt blending. Three different percentages of MMT were introduced into the RH/PVC composites and their effects on various properties of composite were examined. The interaction between PVC, RH, polyethylene-grafted maleic anhydride, and MMT clay in the nanocomposite (RHPNC) was studied by Fourier transform infrared spectroscopy and thermal properties were studied using dynamic mechanical analysis and thermogravimetric analysis. Universal testing machine and limiting oxygen index flammability tester were used to study the mechanical and flame retardency properties, respectively. The delamination of MMT layers and surface morphology of clay-incorporated nanocomposites were analyzed by X-ray diffractometry, scanning electron microscopy, and transmission electron microscopy. Surface of 5 phr (parts per hundred) MMT-loaded composites appeared smoother than those of composites containing 2 or 5 phr MMT. RHPNC with 5 phr MMT showed an overall improvement in mechanical, thermal, and flame-retardant properties. Composites containing 5 phr MMT showed a decrease in water uptake capacity compared to either 2 phr or 10 phr MMT-loaded composites.