The thermoplastic polyurethane/multiwalled carbon nanotube (TPU/CNT) nanocomposites with high conductivity and low percolation threshold value were prepared by melting blending and annealing treatment. The effect of annealing process on the microphase structure and the properties of TPU/CNT nanocomposites was studied. It has been shown that CNT flocculation can occur in TPU/CNT nanocomposites during the annealing process. At a critical CNT content, which defined the percolation threshold, CNTs could form conductivity network. The conductive percolation threshold value of TPU/CNT nanocomposites was decreased from 10 to 4% after annealing process, and the conductivity of TPU/CNT nanocomposites with 10 vol % of CNT could reach 1.1 S/m after an annealing time of 1 h. The significant enhancement of electrical conductivity was influenced by the annealing time and the content of CNTs. The formation of CNT networks was also verified by dynamic viscoelastic characterization. The results of X-ray diffraction and differential scanning calorimetry indicated that annealing process reinforced the microphase separation of the nanocomposites. Mechanical properties test showed that the annealing treatment was in favor of improving the mechanical properties; however, further increase in the annealing time has negative effect on the mechanical properties. (c) 2012 Wiley Periodicals, Inc. J Appl Polym Sci, 2012