Polyurethane (PU) foam is reinforced with SiC nanoparticles to develop core materials for sandwich composites. Isocyanate component (Part A) of PU foam was dispersed with SiC nanoparticles, and then mixed with polyol (Part B) to manufacture nanophased core materials. Nanoparticle reinforcement varied from 0.1 to 2.0 wt% of the total polymer. Both pristine and silane functionalized SiC nanoparticles were used in the investigation. Nanophased foams were tested in compression and flexure to determine the mechanical properties. Fracture toughnesses K (IC) and G (IC) were determined using the SENB test. Sandwich panels were fabricated and tested for face-core debond fracture toughness using the tilted sandwich debond test. The study has revealed that reinforcement of the foam by pristine nanoparticles substantially enhances mechanical properties but degrades fracture toughness. This loss in fracture toughness, however, may be recovered with the use of functionalized nanoparticles. Small concentrations (0.1-0.2 wt%) of functionalized nanoparticles provided large improvement in debond fracture toughness of sandwich specimens.