The low‐frequency dielectric behavior of in situ crystallized and stabilized nanocrystalline t‐NbO2 in amorphous silicon oxycarbide (SiOC) ceramic nanocomposites derived from niobium‐modified poly(hydridomethylsiloxane) (PHMS) is reported. Commercially available PHMS is modified using Nb(OC2H5)5 via chemical and mechanical mixing route. It is observed that the synthesis route and heat‐treatment temperatures significantly affect the crystallization of the ceramic phases, where c‐NbC and t‐NbO2 in amorphous SiOC are formed through chemical and mechanical modification route, respectively. The variation in dielectric permittivity and loss at room temperature with respect to ceramic phases is comprehensively investigated. In contrast to amorphous SiOC ceramics derived from PHMS (ε′ = 100.0 at 1 Hz), t‐NbO2 in amorphous SiOC ceramic exhibits colossal dielectric permittivity (ε′ = 5.0 × 105 at 1 Hz) with low loss (tan δ < 3.0). This is attributed to an interfacial charge polarization and in situ growth of insulator/semiconductor/insulator ceramic phases in amorphous SiOC ceramic nanocomposites.