Electrical properties of Nanodiamond (NDs) with individual diameters of ∼5 nm are important for many engineering applications and drawing significant attention of the current research community. In this paper, we reported a systematic approach to remove sp2 carbon content from NDs particles by annealing method to enhance the interfacial molecular bonding between reinforcement and matrix. X-ray Diffraction (XRD) and Fourier Transform Infra-Red Spectrophotometer (FTIR) studies revealed that annealing of NDs occurs at 450 °C, indicating that the decrease in resistivity is based on the sp2/sp3 carbon ratio of NDs. Thus, it is interesting to study the properties of annealed NDs/epoxy nanocomposites with small filler concentrations varying from 0.1 wt% to 0.5 wt%. In this paper, the Dielectric properties (dielectric constant and dielectric strength), thermal conductivity, impact strength, micro-hardness, and compressive behaviour of NDs/epoxy nanocomposites were investigated. Dispersion of NDs at very low concentration was ensured with the help of UV-vis-NIR absorbance spectra analysis. It was observed that the dielectric constant (ϵ′) was enhanced with NDs loading and reached an optimum value at 0.3 wt% of the loading of NDs whereas the dielectric strength showed a reverse pattern. The thermal conductivity and Izod impact strength showed maximum improvement of 21% and 104.0% respectively at 0.3 wt% NDs loading. © 2019 IOP Publishing Ltd.