Investigation on new polymer electrolytes comprising of thermoplastic polyurethane (TPU) and polyacrylonitrile (PAN) and having different extent of Li+ ions has been made. Both solid and gelatinous polymer electrolytes were prepared and studied. In order to interpret the changes in morphology and conductivity of the composite, Fourier-transform infrared spectroscopy (FTIR) and AC impedance studies have been utilized. The FTIR spectral bands associated with NH and C=O groups of TPU were deconvoluted and used to obtain the modifications in molecular interactions. The swelling characteristics of the composite polymer in the liquid electrolyte were studied. By analyzing the FTIR spectrum of the gelled composite, the interaction of Li+ ion with CdropN groups in PAN was identified. The composite polymer electrolyte has sufficient electrochemical stability to allow safe operation in rechargeable lithium polymer batteries.