Boltorn hyperbranched aliphatic polyesters were functionalized with polyhedral oligomeric silsesquioxane (POSS) and incorporated into linear thermoplastic polyurethane (TPU). Increasing POSS‐functionalized Boltorn concentration led to an increase in agglomerate size and frequency, due to interactions between POSS molecules. The Boltorn dendrimer primarily influenced the morphology of the blends. Blends displayed enhanced thermal stability, due to restrictions on chain segmental motions imparted by the Boltorn and thermal shielding by POSS. Increasing the blend concentration resulted in higher tensile modulus and strength, while ductility decreased due to increased rigidity. Creep deformation decreased and permanent deformation increased with increased Boltorn content, while E′, E″, and Tg values all increased. TPU blended with higher generation functionalized‐Boltorn displayed superior thermal and mechanical properties than those containing lower generation dendrimer, due to enhanced interaction and restrictions on TPU chain segments. Both the Boltorn and POSS contributed to material properties. © 2012 Wiley Periodicals, Inc. J Appl Polym Sci, 2012