Interpenetrating networks of entangled multi-walled carbon nanotubes (MAINTs) and polystyrene (PS) chains were prepared in thin films by solution casting from dilute solutions. The MWNTs were first surface grafted with PS chains to impart good interface compatibility and stereo hindrance against re-aggregation of the MWNTs in the solution phase. The grafting was accomplished by the reaction of 4-vinylbenzyl chloride with carboxylic, acid groups previously attached to the nanotubes, followed by polymerization triggered by AIBN. The dispersion of the nanotubes was uniform, extending globally to form a percolated MWNT network, capable of withstanding large deformation, up to more than 25%, without fracture. The micro-necking of the fracture precursor of crazing was found to be strongly suppressed and only short and narrow crazes were formed in the stressed nanocomposites. Thus, the main energy dissipation mechanism of the composite upon external deformation shifted from craze widening to nucleation of new and short crazes that are much more resistant to fracture. (c) 2005 Elsevier B.V. All rights reserved.