In this paper, we report our latest progress in the development of organically functionalized layered double hydroxides (LDHs) as novel barrier additives for rubber compounds, especially those used in tire innerliners. The utilization of nano-clays to enhance the barrier properties of polymeric materials is well known. However, most past research in this area has focused on cationic clays (e.g. Montmorillonites) while anionic clays such as LDHs, which are equally or even more promising in addressing the need of barrier enhancement, have been largely neglected. Structurally, LDHs consist of high-aspect-ratio nano-layers (similar to cationic clays) that are positively charged (opposite of cationic clays), with charge-balancing anions present in-between the layers. The difference in charge distribution compared to cationic clays opens up opportunities for innovative chemistries to organically functionalize LDHs, a necessary step to achieve good compatibility with polymeric materials. In this paper, we report an entirely new process to manufacture organically functionalized LDHs. The process is based on enzymatic catalysis, and is both environmentally-friendly and cost-effective. LDHs with a variety of chemical functionalities can be produced. The functionalized LDHs are further developed into a hydrocarbon resin based masterbatch for easy incorporation into rubber compounds. Wide angle X-ray diffraction (WXRD) results suggest complete exfoliation of LDH layers in the masterbatch material. Significant enhancement of barrier performance has also been observed in our preliminary compound studies. This work has been financially supported by the National Science Foundation (NSF) via the Small Business Innovation Research (SBIR) program.