Biodegradable hybrid composites Chitosan/para-phenylenediamine (CS/pPDA), montmorillonite/chitosan/para-phenylenediamine (Mt/CS/pPDA), chitosan/ortho-phenylenediamine (CS/oPDA) and montmorillonite/chitosan/ortho-phenylenediamine (Mt/CS/oPDA) clay polymer nanocomposites (CPN) were successfully synthesized. The CPN composites were confirmed by using X-ray diffraction (XRD), Fourier-transform infrared spectroscopy (FTIR), Field emission scanning electron microscopy (FESEM), UV–Vis spectroscopy and photoluminescence (PL) measurements. The nonlinear optical properties (NLO) of CPN were studied by using Z-scan technique in the picosecond (ps) and femtosecond (fs) durations. Open aperture Z-scan studies revealed reverse saturable absorption (RSA) behavior, which gives nonlinear absorption and closed aperture data revealed nonlinear refraction in both time domains. Sign and magnitude of the third order nonlinearity were evaluated. Optical limiting characteristics of the systems for optical switching were examined. Hence, the new CPN can be used as optical limiters.