Metal nanoparticles exhibit a number of interesting, characteristics, including unique physical, chemical, optical, magnetic, and electric properties. Numerous investigations have exploited their properties in a readily usable form by incorporating them into polymers. The current focus of interest is the behavior of such polymer nanocomposites near the percolation loading levels of the metal nanoparticles. This material is particularly suitable for the new integral passive technology. Discrete capacitors are used in many applications, such as noise suppression, filtering, tuning, decoupling, bypassing, termination, and frequency determination, and they occupy a substantial amount of surface area on a substrate. Thus there are limitations in the number of capacitors that can be placed around the chip. Integral passive components are gradually replacing discrete components because of the inherent advantages of improved electrical performance, increased real estate on the printed wiring board, miniaturization of interconnect distance, reduced processing costs, and efficient electronics packaging. For integral capacitors, polymer composite material has emerged as a potential candidate because it meets the requirements of low processing temperature and reasonably high dielectric constant. Yang and Wong, whose patent was filed in 2001, demonstrated novel integral passive component materials with extraordinarily high dielectric constants (K > 1000) and high reliability performance. These materials are characterized by high dielectric constant based on the mechanism of interfacial polarization, although they need precision filler concentration control. The current study overcomes this drawback and produces the composite through an in situ reduction in an epoxy matrix. Material characterization was done through TEM, SEM, X-ray analysis, and energy-dispersive analysis for X rays. (C) 2004 Wiley Periodicals, Inc.