A reactive polymer nanocomposite system was proposed as an effective water vapor barrier material for organic device encapsulation. Nanosized magnesium oxide (MgO) was synthesized by the solution combustion technique using two different fuels, lactose and alanine. The purity and crystallite size of MgO were determined from X-ray diffraction studies. The surface areas and porosity measurements were used to determine the water adsorption capacities of MgO. Nanocomposites with various concentrations (wt% = 0.25, 0.5, 1 and 2.5) of MgO were prepared using Surlyn as the base polymer. The permeation rate of moisture through the fabricated films was calculated using calcium degradation test and these rates were further used to calculate the diffusivities. Accelerated aging experiments were conducted to study the performance of organic photovoltaic devices encapsulated with synthesized films under accelerated weathering conditions. The performance of the barrier materials with synthesized MgO was also compared to that obtained with commercial MgO. The films containing MgO obtained from lactose exhibited better barrier properties compared to other films made with commercial MgO and MgO synthesized using alanine as well as other nanocomposites reported in the literature. This journal is © The Royal Society of Chemistry 2015.