Graphene/epoxy resin nanocomposites were prepared using an in-situ polymerization process, and their formation mechanisms, microstructures, mechanical properties and electrical conductivity were characterized. Results showed that graphene is well dispersed in the epoxy matrix, and covalent cross-links are formed between graphene and epoxy matrix. Tensile strength and modulus of the graphene/epoxy composites were found to increase firstly and then decrease with the increase of graphene loading contents. When the graphene content was 0.3 wt%, tensile strength, tensile modulus and elongation were found to increase by 46.8%, 47.3% and 24.0% compared with those of pure epoxy resin. When the graphene content was 1.38 vol%, the conductivity of the composite was 3.28 × 10−4 S m−1 with a low percolation threshold of 0.47 vol%. Enhancement mechanisms for the properties of composites were identified to be dispersion strengthening, effective transfer of stress and bridging of graphene.