Environmentally friendly thermoplastic nanocomposites were successfully developed using a colloidal suspension of chitin whiskers as a filler to reinforce soy protein isolate (SPI) plastics. The chitin whiskers, having lengths of 500 ± 50 nm and diameters of 50 ± 10 nm on average, were prepared from commercial chitin by acid hydrolysis. The dependence of morphology and properties on the chitin whiskers content in the range from 0 to 30 wt % for the glycerol plasticized SPI nanocomposites was investigated by dynamic mechanical thermal analysis, scanning electron microscopy, swelling experiment, and tensile testing. The results indicate that the strong interactions between fillers and between the filler and SPI matrix play an important role in reinforcing the composites without interfering with their biodegradability. The SPI/chitin whisker nanocomposites at 43% relative humidity increased in both tensile strength and Young's modulus from 3.3 MPa for the SPI sheet to 8.4 MPa and from 26 MPa for the SPI sheet to 158 MPa, respectively. Further, incorporating chitin whisker into the SPI matrix leads to an improvement in water resistance for the SPI based nanocomposites.