A study of the effect of the addition of polyethylene glycol grafted cellulose nanocrystals on the properties of a polyurethane matrix was carried out. The resulting nanocomposite films were characterized by scanning electron microscopy, Fourier transform infrared spectrometry, micro–control electronic universal testing machine and thermal gravimetric analysis. Remarkable improvements in the mechanical and thermal properties of polyurethane could be attributed to well–dispersion of nanofillers in polyurethane matrix and the formation of hydrogen bonding network within the polymer matrix.