The main aim of this research is to investigate the suitability of using a low-grade bentonite in poly vinyl chloride (PVC)/clay nanocomposites for electrical applications. Bentonite was modified using Benzalkonium Chloride (BAC) as cationic surfactant, then both raw and modified bentonite (RB and MB) were introduced as fillers in mixture with PVC resin, plasticizer and stabilizer to produce PVC insulation compound for cables manufacturing. X-ray diffraction (XRD) and X-ray fluorescence (XRF) analysis were carried out to investigate the mineralogical and chemical composition of bentonite sample. Fourier transform infrared spectroscopy (FT-IR), scanning electron microscope (SEM) and contact angle (CA) tests were performed on PVC insulation compound to investigate the interaction and compatibility between bentonite and PVC. Further investigations were established to characterize mechanical, thermal, and electrical properties of PVC compounds. The bentonite sample results show that bentonite is of low-grade bentonite. PVC/ clay insulation compounds results show that compatibility between PVC and bentonite increases in case of using modified bentonite (MB), therefore, the hydrophobicity of resulted PVC compound increased. Moreover, PVC/ MB nanocomposites show better mechanical properties (such as tensile strength and elongation at break) than PVC/raw bentonite (RB) nanocomposites;the tensile strength values have increased from 21.1, 20, 19.1, and 18.2 N/mm2 for 2.5, 5, 7.5, and 10 phr of RB, respectively, for PVC/RB nanocomposite samples to 22.4, 21.3, 20.5, and 20 N/mm2 for the corresponding PVC/MB nanocomposites, On contrast, PVC/ RB nanocomposites give significantly better thermal properties (thermal stability) and electrical properties; the volume resistivity were decreased from 1.07×1012 Ω∙cm for PVC/RB nanocomposites 10 phr of RB for to 5.86×1010 Ω∙cm for the corresponding PVC/MB nanocomposite