The present study reports the preparation and evaluation of polymer composites of chitosan and montmorillonite. The prepared polymer composites were evaluated for various powder properties and characterized by FTIR-ATR (Fourier Transform Infrared Spectroscopy- Attenuated Total Reflectance), XRD (X Ray Diffraction), and SEM (Scaning Electron Microscopy) techniques. Heckel and Kawakita equations indicated good compression characteristics of the composites. The polymer composites were employed in formulating sustained release tablets of aceclofenac. The formation of intercalated lamellar structures due to the entrapment of clay particles in the polymeric matrix network was found to be responsible for the drug release retardant behavior of the composites. The in vitro drug release data were fitted to various models like zero-order, first-order, Higuchi, Korsmeyer-Peppas, and Hixon and Crowell for studying the mechanism of drug release from the formulation. The value of release exponent (n) was found to range between 0.59 and 0.82, indicating non-Fickian (anomalous) drug release behavior. Swelling-induced diffusion of the drug through the polymer matrix and polymer matrix chain relaxation appeared to play a role in the release of the drug from the polymer composites.