In this study poly (vinyl alcohol) (PVA)/chitosan (CS)/montmorillonite (MMT) nanocomposite hydrogels were prepared by freezing-thawing method, as a biocompatible wound dressing. The X-ray diffraction analysis showed exfoliated morphology for prepared nanocomposite hydrogels and their mechanical properties were significantly influenced by nanoclay reinforcement. Using only 3 wt. % of nanoclay enhances the tensile modulus of nanocomposite hydrogel near 35% in compare to its neat hydrogel counterpart. Other mechanical properties such as tensile strength and elongation at break have been investigated, too. Improved mechanical properties of this system along with the other characteristics such as biocompatibility, antibacterial activity and good swelling behaviour, made it desirable candidate for wound dressing applications.