This newsletter concerns the development of multi-functional polymer nanocomposites. Nanomaterials, particularly carbon nanotubes or nanoclays as reinforcement in polymer, are examples of multi-functional materials that leverage the special properties imparted by nanoscale materials. One of the earliest implementations involved making polymers conductive at very low loadings to prevent electrostatic discharge in electronic and automotive applications. But the future promises much more powerful multi-functionality and properties that cannot be attained in standard materials systems. We discuss key challenges to nanocomposites, which include cost reduction and processing challenges. Functionalization of carbon nanotubes for easier processing is very important in enabling commercial applications. The market for these materials remains quite small at this time, but scale up plans in multi-wall nanotube production by some major companies herald a rapidly growing market. We present articles that cover some interesting developments in the field of nanocomposites over the past 12 months.