Polyimide (PI) has been extensively investigated as matrix for blends in the search of novel materials for microelectronics and engineering. Tetraethoxysilane (TEOS) is used as precursor for inorganic/organic hybrid material. The processing of PI with TEOS in thin film form offers considerable advantages to the state-of-the art for developing low dielectric constant materials with improved mechanical and hygroscopic properties for microelectronics devices. Taking this into account, the TEOS was incorporated in polyamic acid—a precursor to the PI and a number of properties were evaluated for PI + TEOS films with different concentrations of TEOS. The films prepared with 10−3–10 wt% concentration of TEOS exhibit good overall balance of processing behaviour. The 350°C cured PI + TEOS films have shown lower dielectric constant with respect to PI. The lower dielectric constant of PI + TEOS films, as determined by Dielectric Impedance Analyzer was attributed to the in situ generation of air containing silica domains derived from TEOS dispersed within the PI matrix in nano meter regime. FTIR analysis has confirmed the generation of silica while AFM analysis showed the distinct appearance of silica domains dispersed into the PI matrix. The mechanical properties were evaluated by Universal Testing Machine on PI and PI/TEOS films. The films with 10−3–1 wt% composition of TEOS showed enhancement in overall mechanical properties while higher concentration i.e. 5 and 10 wt% of TEOS containing PI showed deterioration with respect to pure PI. The water absorption isotherms were measured and their absorption behaviour was correlated with dielectric constant and associated morphology.