It is well known that most of the dielectric failures occur in high voltage equipment due to absorption of moisture by the insulating material from the environment. Hence, the effect of absorbed moisture on electrical and mechanical properties of silica-unsaturated polyester resin (UPR) composites has been evaluated. The absorption of moisture in silica-UPR composites does not show any significant change in electrical and mechanical properties. The effect of acetone and water absorption on silica-UPR composites was determined and it was that found silica-UPR composite shows higher acetone absorption when compared with water. The differential scanning calorimetry and thermal gravimetric analysis studies of silica-UPR composites show no significant change in glass transition temperature using prehumidified (095% RH) silica filler. As there is no significant change in thermal and mechanical properties after exposure to humid conditions, it can be concluded that water does not penetrate inside the polymer matrix. Hence, the silica particles are the best choice to use as filler in UPR matrix for UPR composite used in electrical equipment. The developed silica-UPR composite was successfully used in the preparation of medium voltage inductive transformers. (C) 2012 Wiley Periodicals, Inc. J Appl Polym Sci, 2012