A thin nanocomposite film for use in an absorbent article is provided. The film contains an ethylene polymer, a nanoclay having an organic surface treatment, and a compatibilizer that includes an olefin polymer containing an ethylenically unsaturated carboxylic acid monomer. The present inventors have discovered that through selective control over the particular type and concentration of the components used to form the film, as well as the manner in which it is formed, the modulus and tensile strength of the film can be significantly improved without having an adverse impact on its ductility.