Next generation wearable electronics require stretchable dielectrics. There has been significant effort to characterize and improve the components of dielectric composites for use in these devices. In this work, a new stretchable dielectric material, composited by silver nanoparticles (Ag NPs), nickel nanoparticles (Ni NPs), and polydimethylsiloxane (PDMS), is prepared and characterized. The alternating arrays of Ag NPs groups and Ni NPs groups in the three-dimensional matrix of PDMS function as micro capacitors and prevent current percolation. Compared with PDMS alone, the alternating arrays exhibit a dielectric constant (k) that is increased by 1146% and can reach 35.13, with dielectric loss as low as 0.009. Slightly lower k and larger dielectric loss appear at high frequencies. The material exhibits negative temperature dependence, and the composition ratio affects the dielectric properties. The strain at break is 139.68% and the elastic modulus is as low as 3.57 kPa. By controlling the type, size and dispersion of metal nanoparticles in PDMS matrix, a parallel-plate capacitor with constant capacitance is achieved, demonstrating the dependence of the dielectric constant on the applied strain. Moreover, by replacing the parallel plates with cylindrical fibers, a capacitive strain sensor was demonstrated. After hundreds of stretching-releasing cycles, the dielectrics work normally. The excellent properties of this material suggest its significant potential for use in wearable electronics.