The focus of this study is on incorporating pendant sulfonate groups along the backbone of a liquid crystalline polyester (LCPE) with the aim to improve the dispersion of single wall carbon nanotubes (SWNTs) and nanodiamonds (NDs). Two LCPE matrices, one sulfonated (LCPE-S) and one nonsulfonated reference polymer (LCPE-R), were successfully synthesized via a melt condensation method using aromatic and aliphatic AB, AA, and BB-type monomers. Upon the introduction of SWNT and ND particles, the glass transition temperature (T-g) of the sulfonated LCPE increased from 21.5 degrees C to 41.0 degrees C and 41.9 degrees C, for SWNTs and NDs, respectively. When sulfonate groups were absent, a decrease in T-g was observed. The storage modulus (E') followed a similar trend, i.e., E' increased from 1.3 GPa to 5.2 GPa and 3.4 GPa, upon the addition of NDs and SWNTs. The LCPE-S showed a lower thermal stability due to the loss of sulfonate groups, i.e. the 5% weight loss temperature (T-d(5%)) is similar to 280 degrees C for LCPE-S vs. 333 degrees C for LCPE-R. The decomposition temperature increased somewhat upon addition of the nanoparticles. The ability of dispersing carbon-based nanostructures combined with an accessible melt processing window makes sulfonated LCPs attractive matrices towards preparing nanocomposites with improved thermal and mechanical properties. (C) 2011 Wiley Periodicals, Inc. J Polym Sci Part A: Polym Chem 49: 1079-1087, 2011