Conducting biopolymer blend nanocomposites of cashew gum (CG) and polypyrrole (PPy), with varying concentrations of copper oxide (CuO) nanoparticles were synthesized through an in-situ polymerization method using water as a sustainable solvent. The formation of blend nanocomposites was characterized using UV–visible (UV–vis) spectroscopy, Fourier transform infrared spectroscopy (FT-IR), X-ray diffraction (XRD) and field emission scanning electron microscopy (FE-SEM). UV spectroscopy revealed a significant reduction in absorption intensity with the addition of CuO, indicating enhanced optical properties. FT-IR and XRD analysis confirmed the successful incorporation of CuO into the CG/PPy blend. FE-SEM images revealed the uniform distribution of nanoparticles throughout the biopolymer blend, particularly in the 7 wt% sample. TGA and DSC results demonstrated a significant enhancement in thermal stability, increasing from 352 °C to 412 °C and a rise in the glass transition temperature from 89 °C to 106 °C in the blend nanocomposites. The dielectric constant, dielectric loss, impedance, Nyquist plot, electrical conductivity, and electric modulus were extensively examined at different temperatures and frequencies. The dielectric constant of the CG/PPy blend increased from 2720 to 92,950 with the addition of 7 wt% CuO, measured at 100 Hz. The improved glass transition temperature, thermal stability, and superior electrical properties imply potential usage of the developed nanocomposite in nanoelectronics and energy storage applications.