The effect of CNFs on hard and soft segments of TPU matrix was evaluated using Fourier transform infrared (FTIR) spectroscope. The dispersion and distribution of the CNFs in the TPU matrix were investigated through wide angle X-ray diffraction (WAXD), field emission scanning electron microscope (FESEM), high resolution transmission electron microscope (HRTEM), polarizing optical microscope (POM), and atomic force microscope (AFM). The thermogravimetric analysis (TGA) showed that the inclusion of CNF improved the thermal stability of virgin TPU. The glass transition temperature (T-g), crystallization, and melting behaviors of the TPU matrix in the presence of dispersed CNF were observed by differential scanning calorimetry (DSC). The dynamic viscoelastic behavior of the nanocomposites was studied by dynamical mechanical thermal analysis (DMTA) and substantial improvement in storage modulus (E') was achieved with the addition of CNF to TPU matrix. The rheological behavior of TPU nanocomposites were tested by rubber processing analyzer (RPA) in dynamic frequency sweep and the storage modulus (G') of the nanocomposites was enhanced with increase in CNF loading. The dielectric properties of the nanocomposites exhibited significant improvement with incorporation of CNF. The TPU matrix exhibits remarkable improvement of mechanical properties with addition of CNF. (C) 2011 Wiley Periodicals, Inc. J Appl Polym Sci, 2012