Syntactic foams are closed pore foams fabricated by the mechanical mixing of hollow glass particles in a matrix resin. The present study deals with change in compressive properties of syntactic foams due to the incorporation of nano-sized clay (nanoclay) particles. A surface modified clay, Nanomer I.30E, has been used in the fabrication of specimens. Six different types of syntactic foams are fabricated and tested for compressive properties. Three types of hollow particles (microballoons) of glass having different densities are used for fabrication. Each type of microballoon is combined with 0.02 and 0.05 volume fraction of nanoclay, respectively. The combined volume fraction of microballoons and nanocparticles is 0.65 in all kinds of foams. Compressive properties of these samples are compared with those of syntactic foams without nanoclay particles. It is observed that partial intercalation of nanoclay has taken place in the specimens and remaining nanoclay particles are present in small clusters. Such microstructure leads to nearly the same strength with considerable enhancement in fracture strain. Hence, the toughness of the material, measured as the area under stress–strain curve, is found to increase by 80–200% for various kinds of foams tested in the study. Fracture features of syntactic foams with and without nanoclay are compared.