Today, nanotechnology has added a new dimension to materials technology by creating opportunities to significantly enhance the properties of existing conventional materials. Polymer nanocomposites belong to one such class of materials and even though they show tremendous promise for dielectric/electrical insulation applications (“nanodielectrics” being the buzzword), the understanding related to these systems is very premature. Considering the desired research needs with respect to some of the dielectric properties of polymer nanocomposites, this study attempts to generate an understanding on some of the existing issues through a systematic and detailed experimental investigation coupled with a critical analysis of the data. An epoxy based nanocomposite system is chosen for this study along with four different choices of nano-fillers, viz. TiO2, Al2O3, ZnO and SiO2. The focus of this study is on the properties of nanocomposites at low filler loadings in the range of 0.1 - 5% by weight and the properties under investigation are the permittivity/tan delta behaviors, DC volume resistivity, AC dielectric strength and electrical discharge resistant characteristics. Significant efforts have also been directed towards addressing the interface interaction phenomena in epoxy nanocomposites and their subsequent influence on the dielectric properties of the material. The accurate characterization of the dielectric properties for polymer nanocomposites depends on the dispersion of nanoparticles in the polymer matrix and to achieve a good dispersion of nanoparticles in the epoxy matrix for the present study, a systematic design of experiments (DOE) is carried out involving two different processing methods. Consequently, a laboratory based epoxy nanocomposite processing methodology is proposed in this thesis and this process is found to be successful in dispersing nanoparticles effectively in the epoxy matrix, especially at filler concentrations lower than 5% by weight. Nanocomposite samples for the study are prepared using this method and a rigorous conditioning is performed before the dielectric measurements. The dielectric properties of epoxy nanocomposites obtained in the present study show interesting and intriguing characteristics when compared to those of unfilled epoxy and microcomposite systems and few of the results are unique and advantageous. In an unexpected observation, the addition of nanoparticles to epoxy is found to reduce the value of nanocomposite real permittivity below that of unfilled epoxy over a wide range of frequencies. Similarly, it has been observed that irrespective of the filler type, tan delta values in the case of nanocomposites are either same or lower than the value of unfilled epoxy up to a filler loading of 5% by weight, depending on the frequency and filler concentration. In fact, the nanocomposite real permittivities and tan delta values are also observed to be lower as compared to the corresponding microcomposites of the same constituent materials at the same filler loading. In another significant result, enhancements in the electrical discharge resistant characteristics of epoxy nanocomposites (with SiO2/Al2O3 nanoparticles) are observed when compared to unfilled epoxy, especially at longer durations of discharge exposures. Contrary to these encouragements observed for few of the dielectric properties, the trends of DC volume resistivity and AC dielectric breakdown strength characteristics in epoxy nanocomposites are found to be different. Irrespective of the type of filler in the epoxy matrix, it has been observed that the values of both AC dielectric strengths and DC volume resistivities are lower than that of unfilled epoxy for the filler loadings investigated. The results mentioned above seem to suggest that there has to be an interaction between the nanoparticles and the epoxy chains in the nanocomposite and therefore, glass transition temperature (Tg) measurements are performed to characterize the interaction phenomena, if any. The results of Tg for all the investigated nanocomposites also show interesting trends and they are observed to be lower than that of unfilled epoxy up to certain nanoparticle loadings. This lowering of the Tg in epoxy nanocomposites was not observed in the case of unfilled and microcomposite systems thereby strongly confirming the fact that there exists an interaction between the epoxy chains and nanoparticles in the nanocomposite. Considering the variations obtained for the nanocomposite real permittivity and Tg with respect to filler loading, a dual nanolayer interface model is utilized to explain the interaction dynamics and according to the model, interactions between epoxy chains and nanoparticles lead to the formation of two epoxy nanolayers around the nanoparticle. Analysis shows that the characteristics of the interface region have a strong influence on the dielectric behaviors of the nanocomposites and the suggested interface model seems to fit the characteristics obtained for the different dielectric/electrical insulation properties rather well. Further investigations are performed to understand the nature of interaction between nanoparticles and epoxy chains through FTIR studies and results show that there is probably an occurrence of hydrogen bonding between the epoxide groups of the epoxy resin and the free hydroxyl (OH) groups present on the nanoparticle surfaces. The results obtained for the dielectric properties of epoxy nanocomposites in this study have widened the scope of applications of these functional materials in the electrical sector. The occurrence of lower values of real permittivity for nanocomposites is definitely unique and unexpected and this result has huge potential in electronic component packaging applications. Further, the advantages related to tan delta and electrical discharge resistance for these materials carry lot of significance since, electrical insulating materials with enhanced electrical aging properties can be designed using nanocomposite technology. Although the characteristics of AC dielectric strengths and DC volume resistivities are not found to be strictly advantageous for epoxy nanocomposites at the investigated filler loadings, these properties can be optimized when designing insulation systems for practical applications. In spite of all these advantages, serious and systematic research efforts are still desired before these materials can be successfully utilized in electrical equipment.