Hybrid organic–inorganic polymer nanocomposites incorporating polyhedral oligomeric silsesquioxane (POSS) nanoparticles are of increasing interest for high performance materials applications. Octaisobutyl POSS/polypropylene nanocomposites were prepared at varying POSS concentrations via melt blending. The interplay of POSS molecular geometry, composition, and concentration in relation to the tribological, nanomechanical, surface energy, and bulk properties of the nanocomposites were investigated. Ultra‐low friction and enhanced hardness, modulus, and hydrophobicity were observed for the nanocomposite surfaces, with minimal changes in the bulk thermomechanical properties. Parallel AFM, SEM, TEM, and spectroscopic analyses demonstrated significant differences in POSS distribution and aggregation in the surface and the bulk, with preferential segregation of POSS to the surface. Additionally, contact angle studies reveal significant reduction in surface energy and increase in hysteresis with incorporation of POSS nanoparticles. The differences in bulk and surface properties are largely explained by the gradient concentration of POSS in the polymer matrix, driven by POSS/POSS and POSS/polymer interactions. © 2007 Wiley Periodicals, Inc. J Polym Sci Part B: Polym Phys 45: 2441–2455, 2007