In this paper, the effects of the annealed Nanodiamonds (NDs) on the bulk mechanical and thermal property of NDs/epoxy nanocomposites were investigated. The properties of the annealed NDs were confirmed through x-ray diffraction, Fourier transforms infrared spectroscopy, Raman spectroscopy, and Thermogravimetric analysis methods. In this study, the (NDs)/epoxy nanocomposites were prepared by using an ultrasonically dispersing method with different wt% of NDs such as 0.1, 0.3, and 0.5 in the epoxy matrix. The formation of strong chemical bonding on the annealed surface-modified NDs and epoxy resin, due to presence of the functional groups leads to the formation of an efficient interphase stress transfer. High-resolution transmission electron microscope (HRTEM) studies confirmed cluster free uniform dispersion of NDs in epoxy matrix, which lead to the enhancement of the tensile strength by 133%, tensile modulus by 20%, and storage modulus by 12% corresponding to the loading of 0.3 wt% of NDs in epoxy matrix. Thus, the nanocomposites developed in this method can be used in the high-end structural applications as well as improved thermal stability and viscoelastic behavior. © 2019 IOP Publishing Ltd.