This topical review discusses the theoretical progress made in the field of polymer nanocomposites, i.e., hybrid materials created by mixing (typically inorganic) nanoparticles (NPs) with organic polymers. It primarily focuses on the outstanding issues in this field and is structured around five separate topics: (i) the synthesis of functionalized nanoparticles; (ii) their phase behavior when mixed with a homopolymer matrix and their assembly into well-defined superstructures; (iii) the role of processing on the structures realized by these hybrid materials and the role of the mobilities of the different constituents; (iv) the role of external fields (electric, magnetic) in the active assembly of the NPs; and (v) the engineering properties that result and the factors that control them. While the most is known about topic (ii), we believe that significant progress needs to be made in the other four topics before the practical promise offered by these materials can be realized. This review delineates the most pressing issues on these topics and poses specific questions that we believe need to be addressed in the immediate future. Published by AIP Publishing. [http://dx