Conducting polymer composites of polypyrrole/yttrium oxide (PPy/Y2O3) were synthesized byin situ polymerization of pyrrole with Y2O3 using FeCl3 as an oxidant. The Y2O3 is varied in five different weight percentages of PPy in PPy/Y2O3 composites. The synthesized polymer composites are characterized by infrared and X-ray diffraction techniques. The surface morphology of the composite is studied by scanning electron microscopy. The glass transition temperature of the polymer and its composite is discussed by DSC. Electrical conductivity of the compressed pellets depends on the concentration of Y2O3 in PPy. The frequency dependent a.c. conductivity reveals that the Y2O3 concentration in PPy is responsible for the variation of conductivity of the composites. Frequency dependent dielectric constant at room temperature for different composites are due to interfacial space charge (Maxwell Wagner) polarization leading to the large value of dielectric constant. Frequency dependent dielectric loss, as well as variation of dielectric loss as a function of mass percentage of Y2O3 is also presented and discussed.