A top-down approach is applied for the production of polyurethane (PU)-polyhedral oligomeric silsesquioxane (POSS) nanocomposites, namely melt blending. As opposed to the typical chemical incorporation during synthesis, a POSS moiety with two hydroxyl groups is melt blended into a commercial thermoplastic polyurethane with mass fraction up to 2 wt %. POSS disperses in the matrix in submicrometer-sized crystals, as well as in length scale of few tens of nanometers, in the bulk. Phase separation of the produced composites was studied by both standard dynamic and isothermal annealing experiments. In an approach rare in the literature, the dynamics of phase separation is discussed based on isothermal differential scanning calorimetry curves recorded during annealing. The blended-in nanoparticles affect the micromorphology in a complicated manner, dependent on the intrinsically complex phase separation mechanism of PU. At higher temperatures, POSS slows down the phase separation, whereas at lower ones, it enhances and accelerates it. POSS decreases the mechanical modulus of the final material, presumably as a result of changes in the microphase separation. (c) 2019 Wiley Periodicals, Inc. J. Polym. Sci., Part B: Polym. Phys. 2019