Nanosized inorganic oxides have the trends to improve many characteristics of solid polymer insulation. In this work, the characteristics of novel poly (vinyl chloride) (PVC)/ZnO based nano-composites are investigated. Different concentrations of PVC/ZnO nano-composites using 0, 2, 4 and 6phr of ZnO nanoparticles are prepared by a melt mixing method. The samples are formed into a circular shape disk with 80 mm diameter using compression molding technique. To confirm the formation of nanocomposite and fine dispersion of nanoparticles, scanning electron microscopy (SEM), Fourier transform infrared spectroscopy (FTIR), X-ray diffractometry (XRD), and optical microscopy (OM) are employed. FTIR and XRD show the successful incorporation of the ZnO filler into the PVC matrix and SEM indicates that maximum dispersion is achieved up to PZ2. The effect of filler on the electrical, optical, thermal, and dielectric properties of the PVC are also analyzed. Hydrophobicity of nano-composites is evaluated by both contact angle and Swedish transmission research institute (STRI) classification method. Hydrophobic behavior decreases with the increase in filler content, contact angle increases up to 86°, and STRI class of HC3 for PZ4 is observed. Thermogravimetric analysis (TGA) and differential scanning calorimetry (DSC) are employed to evaluate the thermal stability of the samples. In comparison to PZ0, char yield is seen to increase by11%, 24% and 30% for PZ2, PZ4 and PZ6 samples, respectively. Also, continuous decrease of optical band gap energy from 4.04 eV for PZ0 to 2.57 eV for PZ6 is observed. In the meantime, an enhancement in Tm is observed from 172°C to 215°C. To check the stability of materials against hydrothermal stresses, all the fabricated materials are then subjected to a hydrothermal aging process for 1000 hours and their structural stability is analyzed using optical microscopy and FTIR analyses. After aging, theZnO nano-filler filled polymer shows higher stability against stresses by retaining their structure as percentage degradation of polymer composite was lower than the neat PVC despite the observation of structural degradation of the matrix.