Poly(styrene-co-butyl acrylate)/clay nanocomposites were synthesized in miniemulsion via activators generated by electron transfer (AGET) for atom transfer radical polymerization (ATRP). Optimum amounts of catalyst and reducing agent were chosen by considering a linear increase in ln([M0]/[M]) versus time, narrow molecular distribution, and low polydispersity index (PDI). Critical micelle concentration and cross-sectional surface area per surfactant head group were determined by surface tension analysis. Calculations show that droplet nucleation is the dominant mechanism of nucleation in a miniemulsion system, and there is no micelle in the system. Gel permeation chromatography was used to characterize molecular weight, PDI, and molecular weight distribution. After determination of appropriate conditions, poly(styrene-co-butyl acrylate)/clay nanocomposite latexes were synthesized. Low PDI, narrow molecular weights, and first-order kinetics of the nanocomposites justify that polymerization is well controlled. Kinetics of polymerization decreases by clay loading. The apparent propagation rate constant (kapp) of polymerization in the case of poly(styrene-co-butyl acrylate) is 4.079 × 10−6, which becomes 0.558 × 10−6 in the case of poly(styrene-co-butyl acrylate)/clay nanocomposite with 2% nanoclay. A decrease in the polymerization rate is related to the hindrance effect of nanoclay layers on monomer diffusion toward the loci of growing macroradicals.