Poly (vinyl chloride) /hydrotalcite (PVC/HT) nanocomposites were prepared through vinyl chloride suspension polymerization in the presence of HT nanoparticles surface modified with alkyl phosphate (AP). The thermal stability, smoke emission and mechanical properties of PVC/HT nanocomposites were investigated. It was found that AP molecules were effectively absorbed by HT particles with no intercalation into the interlayer of HT. The dispersion morphologies of PVC/HT nanocomposites were observed by transmission electron microscopy showing that the majority of HT particles were dispersed in the PVC matrix in the nanoscale. The Congo Red measurement and thermogravimetric analysis showed that the thermal stability time, and the temperatures at 10% weight loss and at the maximum weight loss rate of PVC resins increased as the weight fraction of HT in the composite resins increased. The well-dispersed nano-sized HT showed an obvious smoke suppression effect on PVC. The maximum smoke density decreased about 1/3 and 1/2 when 2.5 wt% and 5.3 wt% nano-sized HT were incorporated into PVC, respectively. Furthermore, PVC/HT nanocomposites exhibited greater tensile strength and impact strength than the pristine PVC.