Achieving a homogeneous nanoparticle dispersion is a frequent challenge in the preparation of polymer-matrix nanocomposites. In this paper, we report a polyurethane-TiO2 composite with improved nanoparticle dispersion by the in-situ synthesis of TiO2 nanoparticles in a solution containing the pre-polymer hydroxyl-terminated polybutadiene (HTPB). The coordination chemistry of titanium with the functional groups of HTPB was studied by 1H NMR spectroscopy and protective methods to prevent undesired side reactions were developed. The resulting synthesis approach produced a uniform dispersion of mesoporous anatase TiO2 nanoparticles with minimal agglomeration in HTPB, which could then be cast and cured into bulk polyurethane composites. The performance of the polyurethane-TiO2 composite as a solid propellant binder was investigated. The in-situ TiO2 nanoparticles demonstrated substantially higher activity as combustion catalysts compared to TiO2 nanoparticles incorporated into polyurethane by conventional powder or solution mixing methods.