A new functional N-phenylaminomethyl FOSS was synthesized by traditionally controlled hydrolytic condensation in one step reaction. The POSS structure was ascribed to a T-10 and T-12 derivative mixture as main component by varied characterization methods such as H-1 NMR, C-13 NMR, Si-29 NMR, gel permeation chromatography (GPC) and matrix assisted laser desorption ionization time of flight mass spectrometry (MALDI-TOF MS). Then based on this new POSS reacted with polyether diisocyanate, a series of POSS-PU composites with different POSS concentration was prepared and characterized. The POSS-PU composites showed no macrophase separation up to 52 wt % POSS concentration. The high resolution transmission electron microscopy (HRTEM) images of POSS-PU composites showed a well separated nanostructure of POSS with a typical phase size of 5-10 nm. A critical POSS concentration of 26 wt % was found by DMA, beyond which the POSS-PU showed a permanent network at high temperature. T-g and storage modulus of POSS-PU composites increased with increasing POSS concentration. Young's modulus largely enhanced with increasing POSS concentration at constant T-test - T-g. All the enhanced mechanical properties could be ascribed to the synergetic effect of POSS and PU, where POSS played a role as the nanoscale cross-linker in the PU system and formed a network, thus hindering the motion of the PU chain.