The effect of nanoclay on the compressive response of an aerospace grade epoxy polymer was studied. The resin was modified with montmorillonite clay type nanomer I.30, and compressive tests were performed on the optimised specimen geometry. A series of nanocomposite with 1-5 wt-% nanoclay content was fabricated using mechanical stirring and three-roll mill methods. The degree of dispersion of the clay nanoplatelets was examined using TEM. Static uniaxial compression tests were conducted. The compressive stress-strain curves showed that the presence of nanoclay improved the compressive strength and stiffness, promoted higher plastic hardening behaviour after yielding and enhanced the fracture toughness (area under s-e curve) of the epoxy polymer. The fracture surfaces of the broken specimens were observed using SEM with the aim to identify critical failure mechanisms that contributed to the polymer toughening. Rule of mixtures, Halpin-Tsai and modified Halpin-Tsai models were employed to estimate the compressive modulus of the clay-epoxy nanocomposite system.