Nanosized polypyrrole particles were mainly incorporated into the ionic clusters rather than the nonpolar backbone of Nafion in chemical in-situ polymerization by means of ion-dipole interaction between the sulfonate groups of Nafion and secondary amonium groups of polypyrrole. The incorporation of polypyrrole particles into the clusters, where was the transport pathway, could change the morphology of Nafion matrix, as observed by DSC, SAXS, and WAXD. In particular, the crystallite region of backbones as well as the cluster region of side chains was influenced indirectly by the existence of polypyrrole particles in the ionic clusters. Additionally, the temperature of the cluster transition shifted to a higher value due to the restricted mobility of the clusters, whereas the melting temperature of the nonpolar backbone crystallite shifted to a lower value due to the disruptive effect of swelled cluster. The methanol crossover was reduced more than the proton conductivity because of the existence of polypyrrole particles in the ionic clusters. Suggestions were made as to how the polypyrrole particles existed in the matrix of Nafion and how they influenced the transport properties of composite membranes.