Present article reports the effect of percolation threshold on the electrical and dielectric properties of prelocalized graphite-filled poly(vinyl chloride) composite. The variation of room temperature electrical conductivity, D-shore hardness, and relative permittivity as a function of graphite concentration has been studied below and above percolation concentration of the filler. The percolation threshold at which insulator to conductor transition takes place is estimated to be 0.0026 volume fraction of graphite. The current density-electric field characteristics of the composites having different filler concentrations are also studied. It has been observed that the nonlinear electrical characteristics become linear when the composite undergoes insulator to conductor transition. The dielectric constant and dissipation factor are found to increase slowly up to the percolation concentration and beyond it, a sudden increase in its value is observed. The D-shore hardness is found to decrease by nearly 10% at the point of percolation. (c) 2007 Wiley Periodicals, Inc.