The incorporation of nanoparticles into engineering thermoplastics affords engineers an opportunity to synthesize polymer nanocomposites that potentially rival the most advanced materials in nature. Development of these materials is difficult because thermodynamic and kinetic barriers inhibit the dispersal of inorganic, often hydrophilic nanoparticles in hydrophobic polymer matrices. Using a new solvent-exchange approach, we preferentially reinforce the hard microdomains of thermoplastic elastomers with smectic clay of similar characteristic dimensions. The strong adhesion between the clay and the hard microdomains coupled with the formation of a percolative network not only stiffens and toughens, but increases the heat distortion temperature of the material and induces reversible thermotropic liquid-crystalline transitions. The discotic clay platelets induce morphological ordering over a range of length scales, which results in significant thermomechanical enhancement and expands high-temperature applications. Merging block-copolymer processing techniques with this method for preferential ordering of nanoparticle facilitates the development of new, hierarchically ordered materials.