Tri-n-octylphosphine oxide-capped CdS nanoparticles were synthesized with the cadmium(II) complex of thiocarbohydrazide as a precursor. Nanocomposites were prepared by mixing a toluene solution of poly(ethylene oxide) (PEO) and the obtained CdS nanoparticles. The ultraviolet-visible spectroscopy measurements showed a blue shift of the onset of optical absorption, compared to bulk CdS, which confirmed the presence of nanostructured CdS. A transmission electron microscopy micrograph of the nanocomposite depicted that the nanoparticles are well dispersed in the PEO matrix. Differential scanning calorimetry analysis revealed hindered crystallization of PEO in the presence of CdS nanoparticles. It was also found that increasing the nanoparticle content led to the shift of the onset of decomposition of the matrix towards higher temperature.