Polymer based composites combine the viscoelastic properties of the matrix material as well as the interfacial properties of the reinforcing material resulting in enhanced vibration damping. Significant improvement in vibration damping can be achieved by incorporating nano scale particles as reinforcement into the polymer matrix. The interface contributed by the nano particles are significantly large because of their high specific surface area. An experimental approach to determine the role of the interface between polymer and carbon nanotube (CNT) on damping is proposed by designing two systems of nanocomposites. The energy dissipated during the polymer-CNT and CNT-CNT interfacial sliding are studied by analyzing the microstructural mechanisms of damping related to the system of composites. Incorporation of adduct, a block copolymer of liquid nitrile rubber and DGEBA, into the polymer matrix also enhances the interfacial area. From the microstructural analysis using OM, SEM and TEM, the uniform dispersion of a phase with spherical morphology in a continuous phase is observed. The size of the dispersed phase increased with adduct and CNT content. The significant improvement in vibration damping is due to the frictional sliding of the spherical particles formed in the system. The decrease in the gap between the adjacent particles and the decrease in the elastic modulus of the continuous phase facilitate the sliding. The structure and morphology of the reinforcing material also affect the damping characteristics of the bulk composite. CNTs with different structure and morphology are incorporated in the polymer matrix. The extent of damping obtained is correlated with structure and morphology of CNT and the damping mechanism is formulated.