Nanocomposites of eugenol‐based polybenzoxazines/amine containing polyhedral oligomeric silsesquioxane (POSS) have been prepared through copolymerization of allyl‐containing benzoxazine compounds and amine containing POSS. Their structures, curing behaviour, and thermomechanical properties were characterized by Fourier transform infrared, 1H‐NMR, 13C‐NMR, X‐ray diffraction, differential scanning calorimetry (DSC), dynamic mechanical analysis (DMA), and thermogravimetric analysis (TGA). The nanoscale dispersion of POSS cores in the nanocomposites was verified by scanning electron microscopy, atomic force microscopy, and transmission electron microscopy studies. The results from DMA and TGA show that the thermal stability, crosslink density and flame retardance of the nanocomposites increased when small amounts of POSS cores (5 wt%) were incorporated into the system. Further the POSS incorporation reduces the dielectric constant of the benzoxazines to about 1.32. Hence, the prepared nanocomposites could be used as ultra‐low‐k materials for advanced microelectronics. POLYM. COMPOS., 36:1973–1982, 2015. © 2014 Society of Plastics Engineer