In this study, the properties of bacterial fermentation based poly(hydroxybutyrate-co-hydroxyvalerate) –PHBV thermoplastic biopolymer was investigated by reinforcing natural halloysite nanotubes (HNTs). At first, HNTs were added to PHBV polymer by melt processing technique. The modified PHBV resin was then used to fabricate films using compression molding process. X-ray diffraction (XRD), differential scanning calorimetry (DSC), thermogravimetric analysis (TGA) and tensile tests were performed. XRD results showed mixed intercalated and exfoliated behavior of HNTs in PHBV matrix with an increase in interplanar spacing and decrease in peak intensity. DSC analysis showed that the crystallinity of PHBV resin increased with the increase in HNTs concentration. Also, the DSC endotherm curve showed dual melting peaks indicating formation of different crystalline phases. Higher melting and recrystallization temperature was found in nanophased samples in comparison to the pure PHBV counterpart. The thermal stability, activation energy, tensile and viscoelastic properties of nanophased samples were also increased with an optimum at 3 wt. % HNTs loading. Scanning electron micrographs (SEM) revealed river like pattern in neat films indicating a brittle failure in contrast to rougher surfaces observed in nanophased samples.