Polyhedral oligomeric silsesquioxane (POSS) has been considered as one of the most promising nanofillers in academic and industrial research due to its unique multifunctional nanostructure, easy functionalization, hybrid nature, and high processability. The progress of POSS has been extensive, particularly applications based on single- or multiple-armed POSS. In polymer hybrids, in order to enhance the properties, bifunctional POSS has been incorporated into the backbone chain of the polymer. This review summarizes recent developments in the synthesis, modification, and application of bifunctional POSS-containing composite materials. This includes amino-POSS, hydroxyl-POSS, aromatic ring-POSS, ether-POSS, and vinyl groups-POSS and their applications, exemplified by polyurethanes (PUs) and polyimides (PIs). In addition, the review highlights the enhancement of thermal, mechanical, and optical properties of the composites.