Polyimide (PI) has been extensively investigated as matrices for blends in the search for novel materials for microelectronics and engineering application. The processing of the PI with hydroxyl-terminated polybutadiene (HTPB) offers a considerable advantage to develop a material having good mechanical and thermal stability. Taking this into account, the HTPB was blended with polyamic acid, which is precursor to PI. to form PI + HTPB films. A number of properties were evaluated for PI + HTPB films with ultra low concentrations of HTPB. The films prepared with ultra low concentration (10(-3)-1 wt%) showed unusual synergism, which is attributed to the presence of in situ generated micro/nanostructures derived from HTPB. The microhardness study was used to elucidate the actual mechanical performance due to structure formation of HTPB in a nanometer regime within PI matrix. Atomic force microscopy analysis confirmed the dispersion of HTPB at nano regime within PI matrix. The enhanced thermal stability as determined by thermogravimetric analyzer and Fourier transform infrared spectrometry was attributed to the presence of micro/nanoparticle of HTPB within the PI matrix. The water absorption isotherms were measured and their abnormal behavior was correlated with micro-/nano-sized particles in the PI/HTPB film. (C) 2009 Wiley Periodicals, Inc. Adv Polym Techn 28: 48-59, 2009; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/adv.20144