The toughness and coefficient of thermal expansion of a series of functionalized graphene sheet -epoxy nanocomposites are investigated. Functionalized graphene sheets are produced by splitting graphite oxide into single graphene sheets through a rapid thermal expansion process. These graphene sheets contain ∼10% oxygen due to the presence of hydroxide, epoxide, and carboxyl functional groups which assist in chemical bond formation with the epoxy matrix. Intrinsic surface functionality is used to graft alkyl amine chains on the graphene sheets, and the addition of excess hardener insures covalent bonding between the epoxide matrix and graphene sheets. Considerable improvement in the epoxy dimensional stability is obtained. An increase in nanocomposite toughness is observed in some cases.