Building upon earlier success in forming materials with crystalline ordering of POSS via the telechelic architecture with POSS end-capping polyethylene glycols, here we report similar ordering in PEG-POSS thermoplastic polyurethane applicable to a novel hybrid hydrogel. Thus, a unique series of hybrid thermoplastic polyurethanes (TPUs) were synthesized using poly(ethylene glycol) (PEG) as soft segment and incorporating an isobutyl-functionalized POSS diol (TMP POSS diol) in the hard segment. The molecular weight of PEG was systematically varied to include 10, 20, and 35 kDa while the mole ratio of PEG to POSS diol (as chain extender) was chosen as 8:1. The diisocyanate employed for TPU polymerization was 4, 4'-methylenebis(phenyl-isocyanate) (MDI). Wide-angle X-ray diffraction (WAXD) studies revealed that both the hydrophilic soft segments (PEG) and hydrophobic hard segments (POSS) can form crystalline structures driven by micro-phase separation, itself due to thermodynamic incompatibility. Differential scanning calorimetry (DSC) and rheological studies revealed that thermal history is important in controlling the crystallization of a POSS-rich nanophase. Increasing the cooling rate monotonically decreases the crystallinity of POSS-rich phase and results in a decrease in the ultimate dynamic storage modulus following POSS crystallization and an increase of the loss angle for temperatures above Tm of PEG and below Tm of POSS. We conclude that both composition and thermal history are key factors in determing the internal network built by the POSS nanophase, which will have a significant influence on the properties of the resulting hybrid hydrogels now being studied.