Arylsiloxane was incorporated into polyimide (PI) via electronic interaction with polyamic acid (PAA)/PI, and a wide spectrum of properties were evaluated for different compositions. The samples prepared with relatively low concentrations (0.0001–0.1%) of oligomers showed unusual synergism, which is attributed to the generation of nanostructures dispersed in the continuous PI matrix. The incorporation of siloxane with bulky phenyl groups contributed to enhanced thermal stability as determined by thermogravimetric analysis. Water uptake and methanol absorption by these composites were evaluated and correlated with the underlying micro‐ and nanostructures. Fourier Transform Infrared (FTIR) spectroscopy was used to elucidate the probable reaction mechanism (including in situ polymerization of arylsilanol), and to study the synthetic aspects associated with the molecular composites and nanocomposites formation. POLYM. ENG. SCI., 45:142–152, 2005. © 2004 Society of Plastics Engineers