This experimental study investigates the effects of dispersion techniques on the mechanical properties of POSS‐epoxy nanocomposites. The POSS is dispersed into the epoxy resin by stoichiometrically varying the weight fraction from 0.5 to 10 wt% and materials are prepared using three different dispersion techniques. Various mechanical properties are reported as functions of processing parameters and weight fractions. It is found that the nanocomposites with highly dispersed POSS show higher modulus and toughness values. For example, nanocomposites prepared by ultrasonication show increases in elastic and flexural modulus values by average amounts of 23% and 15%, respectively. Also, it is found that fracture toughness values increased for all three processing techniques, with the highest increase by an average of 50% at 8 wt% of POSS inclusion for nanocomposites prepared by ultrasonication. TEM images of the nanocomposites demonstrate that the properties are also affected by the formation of soft domains at higher loading levels of POSS. Further evidence on the soft domains is found in the variations of Tg. FTIR spectroscopy shows evidence of SiOSi stretching, again suggesting the formation of compliant domains due to POSS‐POSS agglomeration. POLYM. COMPOS., 39:E2445–E2453, 2018. © 2018 Society of Plastics Engineers