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Novel materials for embedded passive applications are in great and urgent demands. High dielectric constant and low dielectric loss are the most important dielectric materials prerequisites for embedded capacitors. It was demonstrated by the authors' that the carbon black (CB)/epoxy composites achieved ultra high K (>13,000). High dielectric loss, however, is the key issue of this material system. In this presentation, a novel method was introduced to control the dielectric loss of dielectric composites by taking advantage of the Coulomb blockade effect, the well-known quantum effect of metal nanoparticles. The increased K value and decreased dissipation factor were observed by the incorporation of in-situ formed Ag nanoparticles. The remarkably increased dielectric constant of the interfacial polarization-based composites is due to the piling of charges at the extended interface. The reduced dielectric loss was observed in the high dielectric constant composite materials containing silver (Ag) nanoparticles in virtue of Coulomb blockade effect. Transmission electronic microscopy (TEM), scanning electron microscopy (SEM) and X-ray diffraction (XRD) were used to characterize the microstructure of the Ag/epoxy composites and the Ag/CB/epoxy composites in order to correlate the structure and morphology of the composites with the dielectric properties.