We developed a paper coating for the potential application in food packaging based on polylactide and montmorillonite. It is applied to the paper in the form of a stable, water-based latex with a solid content of 25–28 wt %. The latex is prepared from a commercially available polylactide, surfactants, montmorillonite, a plasticizer, chloroform (to be removed later) and water by an emulsion/solvent evaporation procedure. This coating formulation is applied to the paper substrate by bar-coating, followed by hot-pressing at 150 °C. The coated papers achieved up to an 85% improvement in water vapor transmission rates when compared to the pristine papers. The coating latex is prepared from inexpensive materials and can be used for a solvent-free coating process. In addition, the ingredients of the latex are non-toxic; thus, the coated papers can be safely used for food packaging.