The tracking phenomenon, a carbonaceous process, in epoxy nanocomposite material has been studied under the AC and DC voltage in the present work. It was observed that the tracking is more severe under the DC voltages, especially under positive DC voltage when compared to negative DC voltage. The leakage current during the tracking studies was measured and moving average technique was used to characterize the trend of current flow. It was noticed that an increase in nanoclay content to epoxy resin shows a reduction in magnitude of leakage current flow during tracking test. It was also observed that the magnitude of leakage current is more under negative DC voltage compared with positive DC/AC voltage. The magnitude of leakage current and the tracking time shows inverse relationship as evident from the present study. A drastic reduction in contact angle was observed for the specimens subjected to tracking test. It was confirmed that surface discharges also cause permanent damage to the insulating material. The WAXD studies indicated that up to 5 wt% of nanoclay in epoxy resin resulted in exfoliated structure. The TEM studies were carried out on the nanocomposite structures. The TG-DTA results showed that a maximum degradation of epoxy resin occurs at around 300 °C. From the EPR study it is realized that, in the tracking formed zone the spin concentration is more in epoxy nanocomposites indicating that tracking as a damage generating process. © 2007 Elsevier Ltd. All rights reserved.