Biodegradable nanocomposites consisting of poly(epsilon-caprolactone) (PCL) reinforced by PEGylated silica (polyethylene-glycol/SiO2) nanoparticles were prepared by a melt-extrusion process. The PEGylated silica nanoparticles were prepared in a facile, one-pot synthesis process. Transmission electron microscopy (TEM) observations of the PEGylated silica nanoparticles inside the PCL matrix indicated that a homogeneous dispersion had been achieved. As a result, the storage modulus (E') in the rubbery plateau increased significantly with the filler contents at all temperatures studied, at values approximately 45% higher than the neat PCL, at a loading level of only 4 wt.%. In comparison, in the absence of polyethyleneglycol (PEG) the silica nanoparticles formed aggregates inside the PCL matrix, and the reinforcement was negligible. The results from X-ray photoelectron spectroscopy (XPS) and infrared spectroscopy (FTIR) analyses identified the location of the PEG at the PCL/silica interface. (C) 2010 Elsevier Ltd. All rights reserved.