Atomic oxygen (AO) in the low Earth orbit (LEO) space attacks polymer matrix composites. AO strikes their surface with sufficient energy to break chemical bonds of constituents. Surface coating is not sufficient to protect composites since a minor defect in the coating layer can result in severe damage, known as AO undercutting erosion. Therefore, polymer matrix must be able to resist against AO effectively to avoid severe erosion. In this study, in an attempt to decrease AO undercutting of polymer matrix composites, a polyhedral oligomeric silsesquioxane (POSS)-epoxy nanocomposite was proposed as an enhanced matrix material. OG POSS (octaglycidyldimethylsilyl polyhedral oligomeric silsesquioxane) containing glycidyl groups was chosen among others. OG POSS shows similar characteristics to epoxy owing to these glycidyl groups. Hence, OG POSS can be dispersed into epoxy resins readily without phase separation and can be easily cured with curing agents. To evaluate the performance of OG POSS-epoxy nanocomposites for potential space applications, the resistance to AO and the tensile properties of OG POSS nanocomposites were measured and compared to nanocomposites containing nanosilica particles or multi-walled carbon nanotubes (MWCNTs), which have been examined widely for space applications. Subsequently, OG POSS-epoxy nanocomposites with higher content of OG POSS up to 10 wt% were fabricated, and AO exposure tests showed the improvement of the resistance to AO. Moreover, the thermal and mechanical properties were checked to evaluate its applicability to the space environment. Finally, a CFRP (carbon fiber reinforced polymer) laminate with outermost lamina composed of OG POSS-epoxy matrix was proposed as a practical method to enhance the resistance of CFRP against AO, and AO resistance of the proposed CFRP and the conventional CFRP whose entire matrix was neat epoxy were compared in terms of mass, thickness and tensile properties.