Nano-sized antimony trioxide (Sb2O3) particles were modified by in-situ methyl methacrylate (MMA)/Sb2O3 polymerization. Subsequently, these modified nanoparticles were compounded with poly(vinyl chloride) (PVC) to prepare PVC/Sb2O3 nanocomposites. In-situ MMA/Sb2O3 polymerization kinetics shows that nano-Sb2O3 particles do not inhibit polymerization of MMA. PMMA shell covered on the surface of nano-sized Sb2O3 particles have enhanced interactions with PVC matrix, breaking down nano-Sb2O3 particle agglomerates and improving their dispersion in the matrix (average particle size of 60-80 nm) and also increasing the particle-matrix interfacial adhesion. Thus, nano-Sb2O3 particles reinforce and toughen PVC. It was observed that at 2.5 wt% of nano-Sb2O3 particles modified by in-situ PMMA optimal properties were achieved in Young's modulus, tensile yield strength, elongation at break and Charpy notched impact strength. Detailed examinations of micro-failure mechanisms of tensile specimens showed that nano-Sb2O3 particles acted as stress concentrators leading to debonding/voiding and deformation of the matrix material around the nanoparticles. Under impact fracture, the nano-Sb2O3 particles prolonged crack initiation time, and increased energy absorptions for crack initiation and fracture propagation caused by strong interfacial interaction between nanoparticles and PVC matrix. These mechanisms lead to impact toughening of the nanocomposites. (C) 2004 Elsevier Ltd. All fights reserved.