ABSTRACTA novel graphene nanomaterial functionalized by octa(aminopropyl) polyhedral oligomeric silsesquioxane (OapPOSS) was synthesized and then confirmed by Fourier transform infrared spectroscopy, thermogravimetric analysis (TGA), Raman spectroscopy, X‐ray photoelectron spectroscopy, transmission electron microscopy, scanning electron microscopy with energy‐dispersive X‐ray spectroscopy (SEM EDX), atomic force microscopy, and X‐ray diffraction. The obtained functionalized graphene (OapPOSS‐GO) was used to reinforce waterborne polyurethane (WPU) to obtain OapPOSS‐GO/WPU nanocomposites by in situ polymerization. The thermal, mechanical, and hydrophobic properties of nanocomposites as well as the dispersion behavior of OapPOSS‐GO in the polymer were investigated by TGA, a tensile testing machine, water contact angle tests, and field emission SEM, respectively. Compared with GO/WPU and OapPOSS/WPU composites, the strong interfacial interaction between OapPOSS‐GO and the WPU matrix facilitates a much better dispersion and load transfer from the WPU matrix to the OapPOSS‐GO. It was found that the tensile strength of the OapPOSS‐GO/WPU composite film with 0.20 wt % OapPOSS‐GO exhibited a 2.5‐fold increase in tensile strength, compared with neat WPU. Better thermal stability and hydrophobicity of nanocomposites were also achieved by the addition of OapPOSS‐GO. © 2016 Wiley Periodicals, Inc. J. Appl. Polym. Sci. 2017, 134, 44440.