The environmental stress cracking resistance of halloysite nanoclay-polyester nanocomposites was investigated using fracture mechanics approach. The incorporation of halloysite nanoclay was found to improve the environmental stress cracking resistance of the nano-composites. The storage modulus of nano-composites measured by dynamic mechanical analysis increased remarkably as a function of halloysite nanoclay content. At 0.7 wt% nanoclay, the Tg improved from 72°C to 76°C. The fracture toughness increased up to 33% and time to failure improved 155% with the addition of 0.7 wt% of halloysite nanoclay. The maximum microhardness was found 119% higher for the same nano-filler concentration compared to monolithic polyester. The reinforcement with 1 wt% showed lower fracture toughness due to agglomerations of nanoclay which act as flaws. The presence of agglomerates weakened the bond between nano-particles and matrix hence reduces the environmental stress cracking resistance by halloysite nanoclay reinforcement.