A thermoplastic elastomer composition possessing superior air impermeability, excellent durability and flexibility. In particular, the composition includes (A) at least one halogenated isobutylene-containing elastomer; and (B) at least one nylon resin having a melting point of about 170° C. to about 260° C.; and (C) a low molecular weight polymeric nylon plasticizer; wherein: (1) the at least one elastomer is present as a dispersed phase of small vulcanized particles in a continuous nylon phase; and (2) the elastomer particles are formed by dynamic vulcanization. Use of a low molecular weight nylon plasticizer provides for improved mixing and rubber dispersion while retaining the high levels of impermeability achievable by the use of nylon resin and halogenated isobutylene-containing elastomer in a dynamically vulcanized composition. Such compositions are particularly useful in applications such as tire innerliners and barrier films or layers as well as hoses.