AbstractIt is still a great challenge to prepare high performance mixed matrix membranes (MMMs) because of the difficulty in finely tuning the compatibility between filler and organic phases. In this work, ZIF‐8 nanoparticles hydrophobically functionalized by 5, 6‐dimethylbenzimidazole (DMBIM) via shell ligand exchange (SLE) reaction were incorporated into polydimethylsiloxane (PDMS) matrix to fabricate defect‐free MMMs. Organic‐–inorganic interface compatibility was realized because of more abundant organic ligands from DMBIM. The effects of different loadings on membrane microstructure and gas separation performance were investigated systematically. A significantly enhanced C3H8/N2 separation performance with C3H8 permeability over 2.10 × 104 Barrer (91 % higher than that of pure PDMS membrane) and C3H8/N2 selectivity of 99.5 (116 % higher than that of pure PDMS membrane) were achieved. Additionally, the as‐prepared membrane also exhibited excellent stability during long term operation. © 2016 Curtin University of Technology and John Wiley & Sons, Ltd.