Carbon nanotubes (CNTs) were dispersed without any solvent in poly(tetramethylene ether glycol), (PTMEG) well above its melting point by ultrasonication in the pulse mode and different times. The polyol/CNT suspensions were used to prepare in situ polymerized thermoplastic polyurethane TPU/CNT nanocomposites with the CNT concentration of approximate to 0.05 vol%, much below the CNT geometrical percolation threshold calculated at 0.43 vol%. Results of rotational rheological measurements and ultraviolet-visible (UV-Vis) spectroscopy analysis revealed improvement in the nanoscale CNT dispersion with sonication time. Moreover, the optical microscopic images and sedimentation behavior for these samples pointed out to the formation of segregated CNT networks with different microstructures at different sonication times. Through-plane thermal conductivity measurements showed an increase in thermal conductivity of the in-situ polymerized TPU/CNT nanocomposites from polyol/CNT suspensions with increasing sonication time followed by a decrease at long sonication times. Different models were used to evaluate the role of CNT dispersion state and created microstructure on thermal conductivity of nanocomposites. The formation of a segregated network at medium sonication times consisting of large CNT aggregates and small bundles increased the nanocomposite thermal conductivity up to 99.7%, while at longer sonication times, an increase in interfacial area with a corresponding increase in kapitza boundary resistance, effectively decreased the system thermal conductivity. POLYM. ENG. SCI., 56:394-407, 2016. (c) 2016 Society of Plastics Engineers