Binary and ternary composites composed of polyoxymethylene (POM), polyurethane (PU), and carbon nanofiber (CNF) were produced by water-mediated melt compounding. PU latex and/or aqueous CNF dispersion were introduced into the molten POM in laboratory kneader to prepare toughened and/or nanoreinforced POM composites. The crystallization of the POM-based systems was studied by polarized optical microscopy. The dispersion of the CNF was inspected in scanning electron microscopy. The mechanical and thermomechanical properties of the composites were determined by dynamic-mechanical analysis, thermogravimetric analysis, short-time creep-, stress relaxation-, and uniaxial static tensile tests. The dielectric response of the nanocomposites was investigated by means of broadband dielectric spectroscopy at ambient temperature. CNF worked as reinforcement (i.e., increased the stiffness, resistance to creep, tensile strength, and reduced the elongation at break), and also improved the thermo-oxidative stability of POM. PU alone had an adverse effect to the above listed properties, which could be enhanced again by additional incorporation of CNF. Dielectric spectroscopy proved to be a useful tool to get deeper understanding on morphological changes caused by the additives. (C) 2010 Wiley Periodicals, Inc. J Appl Polym Sci 117: 1804-1812, 2010