Novel polyurethanes have been synthesized using aliphatic diisocyanate and aromatic chain extenders with varying spacer length. Nanohybrids of those polyurethanes have been prepared using two-dimensional surface modified nanoclay by dispersing it in poly-ol followed by prepolymerization and subsequent extension with chain extenders of a range of length scales. Dramatic improvement in toughness and adequate enhancement in stiffness in presence of nanoclay have been observed for higher spacer length of chain extender exhibiting no trade-off for these new classes of nanohybrids. Step-by-step self-assembly starting from nanometer dimension molecular association to micrometer scale crystallite has been revealed through electronic structure calculation, X-ray diffraction, small angle neutron scattering, atomic force microscopy, and optical images. The role of hydrogen bonding has been uncovered for this type of supramolecular assembly which further aggravated in presence of organically modified nanoclay by making bigger clusters for nanohybrids. The potential application for these nanohybrids as biomaterials has been verified through cell adhesion and cytotoxicity studies. Biocompatibility at the gene level was analyzed through the perspective of HIPK2, a member of the group involved in cell-cycle regulation. Sustained drug delivery has been testified by using bigger dimension of clusters formed by self-assembly. Another means of controlled drug delivery has been verified by dispersing disk-like two-dimensional nanoclay in polymer matrix bymaking diffusion barrier tortuous path.