[Objective] Polyhedral oligomeric silsesquioxane (POSS) amd polyarylacetylene (PAA) nanocomposites were prepared with free radical polymerization initiated by heat. [Methods] Differential scanning calorimetry (DSC) was used to study the reaction between POSS and PAA resin. The dispersion of POSS in PAA resin was tested with phase mode atomic force microscopy (AFM) and scanning electron microscopy (SEM). The thermal behavior of cured PAA, MethacrylIsobutyl-POSS and POSS/PAA was studied by thermogravimetric analysis (TGA) and differential thermogravimetry (DTG). Impact property of POSS/PAA nanocomposites was obtained and fracture surface was observed with SEM. [Results] Heat flow during PAA cure is reduced after POSS is added into PAA resin. The dispersion of POSS nanoparticles in PAA resin is good. TGA results indicate that POSS nanoparticles can increase the thermal stability of PAA resin. Impact tests show that the initial, propagative and total absorbed energy during fracture increase by approximately 179%, 78% and 94%, respectively. [Conclusions] POSS is an excellent modifier of PAA resin. The addition of POSS into PAA resin can increase the thermal and impact properties of PAA at the same time.