Polystyrene (PS)/montmorillonite (MMT) nanocomposite films were prepared by bi-axially stretching compounded and extruded PS/MMT nanocomposite sheets, with an aim to achieve intercalation/exfoliation during compounding and an improved level of exfoliation and orientation during stretching. The characterization results support that the expected morphology of improved exfoliation and orientation was achieved, which leads to more significant property improvement compared to the non-stretched nanocomposite sheets. Meanwhile, only marginal deterioration in optical properties was observed in the PS/MMT nanocomposite films. Considering mechanical stretching can be adopted for large scale production, it represents a facile and potential mass production method of nanocomposites for practical applications.