Improvement in physical and mechanical properties of butyl rubber by application of a modified montmorillonite (MMT) organo-clay (Cloisite15A) has been the main objective of this research. Butyl rubber is widely used in tyre industry thus, reduction in its consumption by decreasing the products thickness/weight along with improvements in physical-mechanical properties of the composite has economical significance. In this work, melt mixing in an internal mixer was selected as the method of dispersing organo-clay in the rubber matrix. Organo-clay content in the nano-composite was altered as 3, 7, 11, and 15 phr, and intercalation of polymer chains into the clay gallery was deduced from the increase in basal spacing of the silicate layers as was measured by XRD. The highest basal spacing detected for the 3 phr nano-composite was about 4.5 nanometers. Dispersion and distribution of the organo-clay were observed by SEM. Effects of organo-clay content and structure on mechanical and rheological properties of nano-composites as well as permeability of CO2 gas through their films were evaluated. It was shown that as small amount as 3 phr montmorillonite organo-clay reinforces butyl rubber to a great extent, affects its elastic and viscous behaviour in dynamic conditions, and increases its barrier properties to CO2 gas. The rate of improvement in properties slows down at organo-clay contents higher than 3 phr.