Aluminium hydroxide nanoparticles [nAl(OH)(3)] were synthesized using continuous ultrasonic cavitation technique. The size and shape of synthesized nanoparticles were confirmed using X-ray diffraction and transmission electron microscopy, which was found to be similar to 55 nm in diameter with needle shape. Millable polyurethane (MPU) rubber nanocomposites were prepared with nAl(OH)(3) as a filler (0.5-2.5 wt% loading) using two-roll mill and moulded on compression moulding machine. Dicumyl peroxide was used as a curing agent. Mechanical property and abrasion resistance was determined using universal testing machine (UTM) and abrasion resistance tester, respectively. Physical (hardness and swelling index) and thermal (flammability and stability) properties were also studied on shore A hardness tester, flammability tester and thermo gravimetric analyzer, respectively. The extent of dispersion of nAl(OH)(3) in MPU matrix was studied using scanning electron microscope (SEM) and atomic force microscope (AFM). MPU rubber:nAl(OH)(3) nanocomposites show improved mechanical, physical and thermal properties compared to pristine MPU composite. This dramatic improvement in properties was due to very small grain size of nAl(OH)(3), which facilitates uniform dispersion of nanoparticles within the chains of MPU rubber. This improvement in properties were up to 2 wt% and decreases subsequently (2.5 wt%) due to agglomeration. nAl(OH)(3) behaves like an ordinary filler at higher wt% loading.