Recently, biopolymers have received great attention due to their eco-friendly properties. Cellulose has been actively studied. It is most abundant biopolymer in the earth and can be renewable, biocompatible and biodegradable. Polymer-clay nanocomposites have attracted various applications such as packaging materials. Montmorillonite (MMT) is widely used reinforcing material. We prepared cellulose-clay nanocomposite hydrogel. Polysilsesquioxane (PSQ) is an organic-inorganic hybrid material with (SiO1.5)n. It is synthesized via hydrolysis and condensation of trialkoxysilane. It can have various types of functional groups. It gives hydrophobicity and functionality on the surface of cellulose. In this work, we report the cellulose-clay nanocomposite coated polysilsesquioxane. It is characterized by XRD, FT-IR, SEM and TGA, etc.