The wide application of nanocomposites in the insulation system has greatly contributed to the performance improvement of power equipment. However, nano fillers are not omnipotent for improving the properties of composite dielectrics. In some situations, nano-modified materials are in fact a compromise of improving some performance features while sacrificing others. In this work, the breakdown characteristics and time-to-failure of polypropylene film with nano-clay fillers have been evaluated under combined thermal stress and AC electric fields. Experiments on plain polypropylene (PP) samples have also been carried out under the same test conditions as control. Test results indicated that the time-to-failure of the samples with nano-clay filler was shorter than those without nano filler, which is different from the previous experience. SEM and EDS analyses were conducted to study how the failure mechanism had taken place in both plain polypropylene and the nano-clay filled polypropylene. The failure phenomenon in these materials can be explained by molecular thermodynamics. The main reason for the premature thermal breakdown of PP nanocomposite is essentially due to the weak coupling between nano-clay filler and polymer matrix. Finally, suggestions are proposed for nano modification methods and lifespan prediction models of composite dielectrics.